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Philips Buys Genlyte for $2.7B, Shines More Light on LEDs

Philips + GlenlyteAs the LED market heats up, young startups and old blue chips alike are vying for a slice of the luminous pie. Dutch electronics giant Royal Philips Electronics said this week it will buy lighting company Genlyte Group, based in Louisville, Ky., for $2.7 billion, the latest in a string of LED-centered acquisitions Philips (PHG) has made over the last two years, and another blow to competitor General Electric (GE), the largest lighting company in North America.

Genlyte produces incandescent, fluorescent, and high-intensity discharge fixtures. The Genlyte purchase follows several other moves Philips has made in the North American energy-efficient lighting world. The company acquired LED maker Lumileds in 2005, for around $950 million, and earlier this year paid $72.8 million for solid-state lighting module manufacturer TIR Systems, followed by LED maker Color Kinetics, for $794 million.

As many ring the death knell for incandescents — The New York Times recently declared fluorescents to be “so over” — America has been extremely slow to react. Philips hopes that Genlyte’s connections with architects and lighting designers will allow them to push more energy-efficient products into the U.S. market; they will initially focus on the commercial and industrial sectors.

GE, meanwhile, is shrinking its incandescent manufacturing through restructuring. While there were rumors earlier this year that GE was eying LED maker Cree (CREE), no announcement has been made. But Philips’ acquisition of Genlyte puts even more pressure on GE.

If not Cree, there are a number of other companies which might help GE gather the LED intellectual capital that Philips is quickly amassing. LED Lighting Fixtures, located in the North Carolina Research Triangle, and LedEngin of Santa Clara, Calif., both focus on LED research and development and manufacturing. Sunnyvale, Calif.-based BridgeLux designs and produces indium gallium nitride found in a number of electronics, while MetroLight of Brentwood, Tenn., makes electronic ballast solutions for HID lighting systems.

All of these companies are poised to grow with the maturing LED market. Its leader will be the one that can successfully sell their superior bulbs to the fickle American consumer and American businesses — who still seem to be in the dark.

4 Responses to “Philips Buys Genlyte for $2.7B, Shines More Light on LEDs”

  1. It’s only a matter of time before LEDs replace incandescent and CFL bulbs. The main consideration right now is product cost, but as GE and Philips move into mainstream production, costs- and prices – will fall accordingly.