Royal Philips (NYSE: PHG) disclosed on Thursday that it has decided to divest its domestic appliances business. PHG has inked an agreement with Hillhouse Capital for the sale of its domestic appliance business. The deal between the firm has valued the Domestic Appliances at an enterprise value of nearly EUR 3.7 billion.

Royal Philips is anticipating getting a cash profit of EUR 3 billion after deducting tax and transaction-related costs. The domestic Appliances business has gained recognition as a global leader with EUR 2.2 billion sales in 2020 in kitchen, coffee, garment care, and home care appliances. The deal is anticipated to execute in the third quarter of 2021, dependent on traditional closing conditions, including the relevant controlling authorizations.

Furthermore, Philips and Domestic Appliances also decided to ink a deal to utilize the Philips brand and certain of Philips’ other domestic appliances brands for manufacturing, sales, and marketing of Domestic Appliances products internationally for a period of 15 years, which is renewable dependent to the terms of the brand licensed deal.

The annual expenses over this period signify a projected net present value of nearly EUR 0.7 billion, following a total deal value of nearly EUR 4.4 billion. The Domestic Appliances business will be displayed as a suspended operation in Philips’ financial reports as of the first quarter of 2021 after the deal.