Amsterdam, The Netherlands -
said Tuesday that it will move its remaining television business into a new joint venture company with
of Hong Kong.
Completion of the transaction is expect by the end of the first quarter of 2012, according to reports.
Under the agreement, TPV will take a 70 percent stake in the new joint venture company, with Philips holding the remaining 30 percent.
Through the agreement, TPV gets the right to use the Philips brand name on TVs outside of the U.S., for five years with an automatic renewal for another five years, as long as certain key performance targets are met.
Philips had previously licensed the rights to the Philips brand for TVs marketed in United States to Funai through a Funai-owned company called P&F USA. Funai also markets TVs under the Magnavox brand, another Philips property, in the U.S. through a separate division.
TPV will pay Philips a royalty based on 2.2 percent of sales (or a minimum of 50 million euros) from the second year of the license term, The Wall Street Journal reported.
Philips will contribute 185 million Euros for advertising and promotional support for the TV business as an investment in the Philips brand and as loans for the joint venture and TPV, according to The Wall Street Journal.