Royal Philips Electronics (AEX: PHI, NYSE:PHG) and the Avio Group, a world leader in the field of aerospace propulsion, today announced that the Avio Group has acquired from Royal Philips Electronics an 80% share of the aeronautical operations of Philips Aerospace. Parties have granted each other irrevocable option rights to acquire respectively to sell the remaining 20% of the shares.

Philips Aerospace is located in Eindhoven, the Netherlands and is producing complex components for the world?s leading aerospace manufacturers such as General Electric, Boeing, Rolls Royce, Lockheed Martin and BAE Systems. After its divestment from Philips, the new company will be named DutchAero B.V. Philips Aerospace provides work for about 100 employees, who will be transferred to the new company. Financial details of the transaction are not being disclosed.

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 EUR 30.3 billion in 2004. With activities in the three interlocking domains of healthcare, lifestyle and technology and 160,900 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.