Philips to acquire PLI, the leading European player in home luminaires

Amsterdam, The Netherlands and Kontich, Belgium - Royal Philips Electronics (NYSE:PHG, AEX:PHI) announced that they have reached an agreement for Philips to acquire Partners in Lighting (PLI) the leading European manufacturer of home luminaires. PLI markets its products under brand names such as Massive, Cucina and Aqua. Subject to receipt of regulatory approval, Philips will acquire PLI from CVC Capital Partners, a private equity investment company, at an enterprise value of approximately EUR 590 million to be paid in cash upon completion of the transaction. The transaction is expected to close in the first quarter 2007.

PLI develops, manufactures and markets a wide portfolio of more than 10,000 distinct home lighting luminaire products currently mainly for the European market. PLI's revenue for 2006 is expected to be around EUR 400 mln with a comparable growth rate of 6%. Philips Lighting expects the transaction to be accretive to its operating margin from 2008 onwards.

"This is a strategic move for us to confirm our leadership position in solid state lighting, in particular for the home where energy-efficient LED solutions and creating atmospheres will be the name of the game," said Theo van Deursen, CEO of Philips Lighting. "PLI entrepreneurship, design innovation and 25% renewal rate of its products each year made them a true market driven company, responding to market and consumer lifestyle trends," he added. "This acquisition, and PLI's strong record of growth and margins, perfectly fits in our ambition to shape the lighting industry with a growth of 6%, while maintaining a margin around 12%," he said.

"Through Philips broad expertise in lighting, its wide capabilities in LEDs, and extensive global reach and resources, we will be able to further expand our home lighting business," says Jules Noten, CEO of PLI. "We look forward to becoming a global player and industry shaper in the transition towards LED applications."

Founded in 1926, PLI is a leading manufacturer of home luminaires and currently employs approximately 4700 people. Its headquarters are located in Kontich, Belgium, with manufacturing operations based in China, Hungary and a specialized one in Belgium. PLI has 24 sales organizations and the company exports to more than 70 countries. Through this acquisition both companies will be able to benefit from their complementary expertise and sales channels in order to expand their business.

For further information, please contact:

Royal Philips Electronics

Jeannet Harpe

Philips Corporate Communications

Tel +31 20 59 77199

email jeannet.harpe@philips.com

About Royal Philips Electronics
Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is a global leader in healthcare, lifestyle and technology, delivering products, services and solutions through the brand promise of "sense and simplicity". Headquartered in the Netherlands, Philips employs approximately 126,000 employees in more than 60 countries worldwide. With sales of EUR 30.4 billion in 2005, the company is a market leader in medical diagnostic imaging and patient monitoring systems, energy efficient lighting solutions, personal care and home appliances, as well as consumer electronics.

About CVC
CVC is a leading independent private equity group which advises funds of over EUR 16.8 billion in Europe and Asia. CVC European Equity Partners IV closed in July 2005 raising EUR 6 billion and seeks to invest in a diverse range of companies across Europe, with CVC continuing its focus on long-term investments and working in partnership with management. Since 1996, CVC has been the most active private equity firm in Europe, with CVC funds investing some US$7 billion in buyout transactions. During this time, CVC funds have also achieved top quartile performance based on independent benchmark analysis undertaken by Cambridge Associates.

CVC operates an integrated European network of 12 offices. CVC's European operations have an experienced team of 62 investment professionals now led by 16 partners who are responsible for evaluating investments, providing strategic input to portfolio companies and maintaining a regular dialogue with investors. The current European portfolio totals 41 investments. CVC Asia Pacific is an established network of four offices with 33 staff, of which 23 are investment professionals.