Philips, LG forge 1.6 b alliance

Under a letter of intent signed last week and approved yesterday by the two firms8217; boards of directors, Philips Electronics and LG Lcd will hold equal rights to manage the joint venture.

quot;This is an excellent transaction for both companies and their shareholders, and exactly meets Philips8217; criteria for investment,quot; said Cor Boonstra, president and chief executive of Royal Philips Electronics.

quot;We are partnering with an already profitable operation and a strong management team we can work with, investing in our divisional portfolio and furthering the digital strategy of Philips ingeneral,quot; he said.

LG chairman Koo Bon-Moo said, quot;we have been pursuing a growth strategy through forming strategic alliances with leading global companies,quot; adding quot;through foreign capital investments, LG not only seeks to improve its financial structure but also its global competitiveness by forming strategic partnershipquot;.