TPV will take 70% of the business and will operate in markets outside China and the US, while Philips will own the remaining 30%.
TV sets sold by the venture will bear the Philips brand name for at least five years, although the Dutch consumer electronics group has the option to sell its 30% stake to TPV after this period.
The company has struggled to match the success of rivals Samsung and Sony. Poor TV sales drove Philips’ profits to plummet 31% in the first quarter of 2011 to €138m (£122m).
The Philips’ TV arm was once a market leader and the company invested heavily in marketing campaigns, including its award-winning “Parallel Lines” ad. However, competition from rivals, excess inventory and “negative consumer sentiment in developed markets” has caused the division’s dominance to fade.
Frans van Houten, Philips’ newly appointed CEO, says finding a solution for the company’s television business was a “top priority”.
He adds: “We strongly believe that the intended 30% – 70% joint venture with TPV that was announced today will enable a return to profitability for the television business, and an increased portfolio focus for Philips in health and well-being.”