NEW YORK (AP) -- Netherlands-based Royal Philips Electronics NV said Tuesday it has reached a brand licensing agreement to transfer its consumer television activities in the U.S. and Canada to Japan-based Funai Electric Co.
Also, Philips said it plans to take further steps to improve the efficiency of its global supply base and focus its TV business on the strongest markets, especially in Europe and some emerging countries.
As a result of these actions, Philips' expects to book total charges of up to 125 million euros ($196.3 million) during 2008.
''The agreement with Funai and the other measures to improve profitability we are planning, follow our commitment that we would take decisive steps in addressing the unacceptable profitability levels in our TV business in 2008,'' said Philips President and Chief Executive Gerard Kleisterlee.
The agreement has a minimum term of five years and takes effect on Sept. 1. Philips will receive royalty payments in exchange for Funai's right to exclusively use the Philips and Magnavox brand names for its consumer television offerings in North America.
Philips' North American television sales totaled about 1 billion euros ($1.57 billion) in 2007.
Philips said its other consumer business categories in North America will continue to be manufactured, marketed and sold by Philips.
The deal's completion is subject to regulatory approvals.
U.S.-traded shares of Philips slipped 67 cents to $38.83 in afternoon trading.
