Last updated: October 25. 2013 7:36AM - 242 Views
Associated Press

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(AP) Royal Philips NV says it has ended a $200 million sale and licensing deal it struck this year with Japan's Funai Electric Co. and will seek damages for breach of contract.

Under the companies' January agreement, Funai was to assume production of Philips' audio, video and media accessories unit and license the right to distribute them with Philips branding for five years.

Philips said in a statement Friday that Funai "refused to take the necessary steps to enable completion of the transaction."

Chief Executive Frans van Houten said the business is profitable and will return to Philips "with a lower cost structure" than it had before. The Hong-Kong based subsidiary had 1.2 billion euros ($1.66 billion) in annual sales and 2,000 employees, Philips said.

Associated Press
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