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IPE special report May 2018

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Philips gains €42m from pension centre sale

NETHERLANDS – Electronics giant Philips has disclosed a €42m gain from the sale of its in-house Pensions Competence Center.

The company announced it would sell the centre, formerly known as Schootse Poort, to Merrill Lynch Investment Managers for an undisclosed sum in April last year. The deal, under which MLIM would run €12bn for the Philips Pension Fund, was completed in September.

The Philips Pensions Competence Center and Philips Investment Management are now operating under the MLIM name in Eindhoven.

Philips, in its 2005 earnings report, also today disclosed that it would eliminate its funding deficit in its UK defined benefit scheme with an extra €400m contribution in the first quarter of 2006. The impact on company earnings would be “minimal”.

The expected return on pension assets in 2005 was €739m for Dutch plans and €360m for other schemes. Overall pension costs for 2006 were expected to be around €220.

Philips’ 2005 net income was €2.87bn, from €2.84bn in 2004.

Last July, Bob Doll, MLIM's president and chief investment officer, said the Philips deal would have a "halo effect" for MLIM.

He told IPE that the firm was in talks that could lead to further asset management mandates in the Netherlands, though he declined to be specific. And he said the firm would "find out over time" whether the deal was a success.

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