Philips completes sale of 80.1% stake in Semiconductors business to private equity consortium KKR, Silver Lake, Bain Capital, Apax and AlpInvest

Friday, September 29, 2006

Amsterdam, The Netherlands - Royal Philips Electronics (NYSE:PHG, AEX:PHI) announced today that it has completed its sale of an 80.1% stake in its Semiconductors business to a private equity consortium consisting of Kohlberg Kravis Roberts & Co. (KKR), Silver Lake Partners, Bain Capital, Apax Partners and AlpInvest Partners NV. Under the terms of the agreement, which was announced on August 3, 2006, Philips sold an 80.1% stake in its Semiconductors business, and estimates that, after subsequent payment of taxes, it will receive approximately EUR 6.4 billion in cash. This transaction puts the enterprise value of the entire stand-alone semiconductors company - now known as NXP - at approximately EUR 8.3 billion.

With the completion of the transaction, Mr. Frans van Houten, President and CEO of NXP, relinquishes his position as member of the Board of Royal Philips Electronics. As a result of the transaction, Philips will treat its Semiconductors activities as "Discontinued Operations" in the company's financial reporting as of Philips' 2006 Third Quarterly Report, to be published on October 16, 2006.

For further information, please contact:
Jayson Otke
Philips Corporate Communications
Tel +31 20 5977215
email jayson.otke@philips.com

About Royal Philips Electronics
Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is one of the world's biggest electronics companies and Europe's largest, with sales of $37.7 billion (EUR 30.4 billion) in 2005. With activities in the three interlocking domains of healthcare, lifestyle and technology and 161,500 employees in more than 60 countries, it has market leadership positions in medical diagnostic imaging and patient monitoring, color television sets, electric shavers, lighting and silicon system solutions. News from Philips is located at www.philips.com/newscenter

Forward-looking statements
This release may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

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