Royal Philips, the multinational former consumer electronics giant, wants to sell the small appliance sector, including espresso machines with prestigious brands Saeco and Gaggia. The group urgently needs to raise cash to strengthen the only sector in which it intends to concentrate investments, that of healthcare equipment, where it competes with Siemens. Moreover, the sector seems to be on the rise, also considering the growing risks of a globalization of health emergencies, as the spread of the Chinese coronavirus is demonstrating.
After another quarter with disappointing results, the Philips board has given itself about a year to sell well the small sector, which is worth over 2,3 billion euros. As CEO Frans Van Houten told Bloomberg, the sale will allow for focus exclusively on healthcare products and services. And therefore, what used to be one of the global giants of consumer electronics is increasingly reducing the company perimeter, after having gradually abandoned the TV, DVD and lighting sectors, where it boasted a series of patents with world records destroyed by dumping and from fake Asians, and, even earlier, he had sold Ignis to Whirlpool, one of the white giants.
Philips is convinced to cut losses by getting rid of all the jewels in the crown. The world market for real espresso machines is very interesting (especially if you work with an Italian or Italian sounding brand): it is constantly growing, with a value of approx 6 billion dollars and with constant growth forecast between now and 2025 of around 3,7-5 per cent. The number one in sales of espresso machines has been De' Longhi for years with a share of over 34 percent. And it is curious that several years ago Philips, which had targeted the promising espresso market, was about to acquire De'Longhi, which today could be among the likely buyers of the Dutch company's small appliances.
Estimating the value of world sales of domestic espresso machines appears very prudent if we consider that the Asian markets are growing rapidly and that new variants such as organic coffee have been added. M&A experts estimate the purchase price in a range of 2,2-3,7 billion euros. It shouldn't be difficult to find a group interested in a type of product - not just espresso machines - that stand out for their design, performance and high-end aesthetic levels.
