General Lighting Company (GLC), a market leader in lighting in Saudi Arabia, Tuesday announced that it has entered into agreements to create a joint venture (JV) with Philips Lighting, a global leader in lighting.

The JV will be a leading lighting player in the Kingdom, the largest economy in the Middle East by GDP. It will provide a full range of LED lighting solutions and strengthen GLC group’ market position, while creating growth opportunities in sustainable technologies to support the government’s objective to reduce energy consumption.

It will also bring together GLC’s deep local market knowledge and strong commercial capabilities with Philips expertise in LED technology and the benefits of its global supply base.

GLC’s capital is SR200 million and SR1.2 billion turnover in 2013. “By partnering with Philips, GLC will benefit from ‘best in class’ lighting innovations and from an extensive lighting know-how and services, which will rapidly strengthen GLC’s ‘energy efficient’ lighting propositions for the great benefit of the Saudi marke,” said Abdullah Ibrahim Al-Hobayb, chairman of GLC group.”

“By partnering with GLC, Philips will be able to grow its business in this important market, particularly in relation to LED lighting,” said Eric Rondolat, CEO of Philips Lighting.

Under the terms of the agreements, Philips will acquire 51 percent of GLC, from a consortium of shareholders, for a total amount of $235 million (on a cash-free, debt-free basis) plus additional transaction costs. Philips’ current lighting activities in the Kingdom will be combined with GLC.

Alliance is the holding company managed by Abdullah Al-Hobayb, founder and chairman of GLC, and will be the JV partner with a 49 percent stake. Closing of the proposed transaction is subject to customary regulatory approvals and other closing conditions and is expected to be within the 2nd quarter of this year.