UPDATE: Philips Veteran Frans Van Houten to Rejoin As CEO

AMSTERDAM--Dutch electronics giant Royal Philips Electronics NV (PHIA.AE) said Thursday company veteran Frans van Houten will rejoin the group as President and Chief Executive Officer, subject to shareholder approval.

Dutchman Van Houten (50), who was a member of Philips' management board until September 2006, will take over from Gerard Kleisterlee (64) when he retires in April next year.

Van Houten has won a reputation as a restructuring specialist since leading the spin off of Philips' semiconductor business, NXP, in 2006. He has since advised semiconductor equipment maker ASM International NV (ASMI.AE) on restructuring and last December was hired as an independent adviser to the management board of Dutch bank ING Group AV (INGA.AE) and charged with separating the company's banking and insurance operations within the year.

The performance of semiconductor group NXP under Van Houten's guidance faltered somewhat after it split from Philips, but the company was also burdened with very high debts and a rapidly deteriorating chip market.

A graduate of Rotterdam's Erasmus University, Van Houten joined Philips when he was 26 years old and worked his way up the ranks, holding various posts in the U.S., Germany and Singapore.

Philips said Thursday Van Houten will rejoin Philips on October 1 and will assume the position of Chief Operating Officer from January 1, 2011, working closely with Kleisterlee to ensure a smooth transition before he takes on the CEO role April 1.

"I am happy to see Frans return to our company," said Kleisterlee, "Frans was a strong member of my team and a strong contributor in setting the direction of the company. I regretted to see him leave with the semiconductor spinout. Under his leadership Philips' future will be in very good hands."

Analysts were generally positive about the appointment and don't expect it to bring a change in direction for Philips, which is due to announce a new five-year plan in September.

"With the appointment of Frans van Houten, Philips have neatly combined the virtues of a former Philips insider with the advantages of recent experience outside the group," said Matt Williams, an analyst at HSBC. "We do not expect a departure from the current health and well-being strategic vision and expect this appointment to be viewed positively by the market," he said.

Following the departure of Philips' consumer lifestyle head Andrea Ragnetti earlier this year, Rudy Provoost, who heads Philips lighting and Steve Rusckowski, head of the healthcare division, were tapped as possible successors to Kleisterlee.

Van Houten's appointment will be put to shareholder vote at Philips' Annual General Meeting on March 24, 2011, but has the full backing of the board.

The maker of medical scanners, lights and shavers reports second-quarter earnings on July 19. At 1011 GMT Philips' shares were flat at EUR24.70 in a broadly higher AEX market.

www.philips.com

-By Roberta B. Cowan; Dow Jones Newswires; [phone]; [e-mail]