Royal Philips Electronics announced today that it would sell its majority stake in its semi-conductor division to a private equity consortium.

The Netherlands-based company agreed to sell 80.1 percent of its stake in the second largest division for the firm. The enterprise value for the firm's semi-conductor business was approximately €8.3 billion of which €0.9 billion would still be owned by Phillip. The consortium, which bought it includes; Kohlberg Kravis Roberts & Co. (KKR), Silver Lake Partners and AlpInvest Partners NV.

"This is a defining moment for both Philips and its semiconductors business,' President and CEO of Royal Philips Electronics Gerard Kleisterlee said. "As a stand-alone company, the semiconductors business will have every opportunity to realize its full potential and we are very pleased to have found strong partners that share our belief.'

The company, which would retain a 19.99 percent interest in the semiconductor company, said the sale would allow the firm to place greater focus on the healthcare and lifestyle market. Klisterlee explained that the company would become much simpler, dedicated to improving the quality of people's lives through its brand of "Sense and Simplicity.'

"With this transaction we have now practically completed our shift towards more stable, cash generative businesses and away from the earnings volatility associated with cyclical industries like Components and Semiconductors, a journey we started in 2002,' he said.

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