Amsterdam, The Netherlands, 28th November, 2005 --- Today Royal Philips Electronics (NYSE: PHG, AEX: PHI) of The Netherlands and NEC Corporation of Japan (NYSE:NIPNY) announced that they have signed a binding Memorandum of Understanding (MoU) to form a joint venture in enterprise communications, by NEC taking a majority share in Philips' Business Communications unit (PBC). The new company will be named "NEC Philips Unified Solutions". Upon completion of the transaction, NEC will hold 60% and Philips 40% of shares.

 

By combining NEC's strong technology base and market position in Japan and North America, with Philips' strong market presence in Europe, NEC Philips Unified Solutions will be able to strengthen its position in Europe in view of the fast technology changes in the modern telecom world.

 

The agreement involves all Philips Business Communications' activities and businesses in EMEA (Europe, Middle-East and Africa), with a total workforce of approximately 900 people.

 

Philips and NEC have been cooperating closely since 2003 in a strategic partnership to jointly develop and deploy IP technology in enterprise communications. Since then both parties have leveraged their expertise to successfully address new opportunities in the IP communications market, further developing customer base and channels to market.

 

Kazuo Tsuzuki, Associate Senior Vice President of NEC's Enterprise Solutions Operations stated: "This joint venture will strengthen NEC's global position in the telecom market and we are expecting to grow sales of UNIVERGE solutions to the global customers on top of the continued sales of the Philips portfolio. It will support NEC's growth ambition by using the strong market position of PBC in the European enterprise communications market. "

 

Commenting on the agreement, Harrie Brunklaus, CEO of Philips Corporate Investments said: "The combined strengths of NEC and Philips will offer NEC Philips Unified Solutions unique opportunities in developing a powerful portfolio of solutions and services, extending market reach and share of the business communications market in Europe".

 

The transaction will be conditional upon regulatory approvals and is expected to be completed in the second quarter of CY 2006.

 

About Royal Philips Electronics

Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is one of the world's biggest electronics companies and Europe's largest, with sales of EUR 30.3 billion in 2004. With activities in the three interlocking domains of healthcare, lifestyle and technology and 161,100 employees in more than 60 countries, it has market leadership positions in medical diagnostic imaging and patient monitoring, color television sets, electric shavers, lighting and silicon system solutions. News from Philips is located at www.philips.com/newscenter

 

About NEC Corporation

NEC Corporation (NASDAQ: NIPNY) (FTSE: 6701q.l) is one of the world's leading providers of Internet, broadband network and enterprise business solutions dedicated to meeting the specialized needs of its diverse and global base of customers. Ranked as one of the world's top patent-producing companies, NEC delivers tailored solutions in the key fields of computer, networking and electron devices, by integrating its technical strengths in IT and Networks, and by providing advanced semiconductor solutions through NEC Electronics Corporation. The NEC Group employs more than 140,000 people worldwide and had net sales of 4,855 billion yen (approx. $45 billion) in the fiscal year ended March 2005.

For additional information, please visit the NEC home page at: http://www.nec.com.

 

For more information, please contact:

Jeannet Harpe

Philips Corporate Communications

Tel: +31 20 59 77199

Email: jeannet.harpe@philips.com

 

Chris Shimizu

NEC Europe Ltd

Tel: +44 (0)20 8752 2794

Email: chris.shimizu@uk.neceur.com

 

Forward-looking statements:

This release may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.