Philips to raise stake in Grundig

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The Independent Online
UNION Bank of Switzerland is to sell its stake in Grundig, the German electronics company, to Philips, the Dutch group. Philips already has 31.6 per cent and is expected to take control of Grundig at the end of next month.

A consortium of banks including UBS, Dresdner and Bayerische Vereinsbank holds profit-sharing certificates that, if converted into Grundig shares, would represent 19 per cent of the company. UBS said it was not interested in converting its shares as it had always considered its interest in Grundig to be temporary. However, UBS added that it had not had direct contact with Philips, as Dresdner Bank would take the lead in any sale.

Grundig made a loss of Dm296m ( pounds 114m) in 1992 and is expected to report a loss of about Dm300m for last year. It has started reorganising and plans to cut 3,000 jobs - about a fifth of the workforce.

The equity link with Philips dates back to 1979, and although the stake has remained constant, the Dutch group has appeared to take increasing control of Grundig's affairs. Last year Philips, hit by the slump in consumer electronics markets, said it would try to cut out duplication of production and development within the partnership.

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