Elcoteq acquires Philips' Flat Panel TV Manufacturing Operation in Mexico

The acquisition and related cooperation agreements further strengthen Elcoteq's position as an EMS company serving strongly growing FTV industry. The deal includes a long term cooperation agreement with Philips to provide manufacturing services to Philips for its Latin American FTV business and its PBS (Philips Business Services) business in the Americas and a long term cooperation agreement with Funai Electric to provide manufacturing services to Funai's FTV business in North America. The acquisition includes certain fixed assets and inventories of Philips' Juarez manufacturing operation. The total consideration to be paid by Elcoteq in cash will amount to approximately US-$ 32 Million. The current Philips personnel in Juarez, Mexico will continue in Elcoteq's organization. The plant currently has approximately 740 employees. Elcoteq will lease the required manufacturing space of approximately 20,000 square meters. Elcoteq will take over the Juarez unit immediately. Elcoteq expects the net sales related to the deal to be on a level of US-$ 200 million in 2008 (including LCD panels) and US-$ 250 million in the following years (excluding LCD panels). The deal is expected to have positive impact on the company's Home Communications Business Area profitability already in 2008. The acquisition provides Elcoteq with class capabilities to offer final assembly services for FTVs as well as related engineering and new product introduction (NPI), supply chain management and sourcing services.