The U.S. blocked a deal to sell it to Asian investors on undisclosed national security grounds.
Philips will sell an 80.1% stake in Lumileds, its LED components and car lighting business, to U.S. investor Apollo apo , receiving $1.5 billion in cash, it said on Monday.
The deal values Lumileds at around $2 billion including debt, Philips said, and is expected to close in the first half of 2017, pending regulatory approval.
The sale of Lumileds is the final step in Philips’ two-part sell off of its lighting businesses, after the IPO of Philips phg main lighting business, Philips Lighting in May.
An earlier attempt to sell the Lumileds components business at a valuation of $3.3 billion to a group of Asian investors failed after it was blocked by the U.S. government due to undisclosed national security concerns.
Philips spokesman Steve Klink acknowledged the lower price was a disappointment. The exact reasons for decision of the Committee on Foreign Investment in the United States (CFIUS) were never made known. The rejected buyout consortium was dominated by Chinese companies, but the LED technology owned by Lumileds was not seen as having important military significance.
“What can you do?,” Klink said. “We feel it was a good price under the circumstances.”
Lumileds, which is headquartered in San Jose, California, has been a legally separate company within Philips since 2015. In the third quarter of 2016, the business reported profit of 101 million euros, up from 86 million euros in the same quarter of 2015.
Philips said Lumileds had annual sales of around $2 billion, with 9,000 employees.