Philips buys U.S. lighting maker Genlyte for $2.7B

AMSTERDAM, Netherlands -- Phillips agreed to pay $95.50 (64.77 euros) a share in a management-agreed takeover that values the U.S. company at 1.83 billion euros.

Genlyte's shares closed at $62.67 Friday, and Philips' offer represents a 52% premium. Louisville-based Genlyte makes fixtures for lights used mostly by companies.

Amsterdam-based Philips said Genlyte had sales of around $1.7 billion in the 12 months ended Sept. 30.

Theo van Deursen, head of Philips' lighting division, said Genlyte's distribution channels were more important to Philips than its manufacturing technology.

Philips has invested heavily in developing energy-saving bulbs, but has so far been more successful in Europe than in the United States in marketing them.

"It's very important that (Genlyte ) are in contact...with the lighting designers and architects, which helps us a lot in bringing new products to the market," Van Deursen said.

Van Deursen said Philips hopes to sell new products, especially LEDs, to Genlyte customers.

LEDs, or light emitting diodes, use computer chips to produce light, rather than the glowing filaments used in traditional incandescent bulbs or the gas used in fluorescent bulbs. Philips expects LEDs to gradually replace both incandescent and fluorescent lights in the coming decade, as they are more energy-efficient, they last longer, and the cost of producing them is expected to fall rapidly.

Philips said it expects to complete the deal in the first quarter of 2008, pending approval by shareholders and regulators.

Van Deursen said Philips believes it could boost Genlyte's sales around $30 million annually with new product offer and cut costs by around the same amount by helping the company with purchasing and distribution.