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FLUKE, PHILIPS INTEND TO MERGE ALLIED TEST & MEASUREMENT BUSINESSES

FLUKE, PHILIPS INTEND TO MERGE ALLIED TEST & MEASUREMENT BUSINESSES
 EVERETT, Wash., Aug. 26 /PRNewswire/ -- John Fluke Mfg. Co. Inc. (AMEX: FKM; PSE) of Everett, Wash., U.S.A., and Philips Electronics N.V. (NYSE: PHG) of Eindhoven, The Netherlands, announced today their intention to restructure their five-year-old alliance in test and measurement (T&M). It is anticipated that Fluke would acquire most of Philips T&M operations for cash and stock. The companies expect to finalize the proposed transaction within the next few months, after a period of due diligence.
 It is expected the transaction would add approximately $125 million to Fluke's revenues. This figure does not reflect Philips total T&M revenues, as Fluke would not be acquiring all of its businesses and the intercompany sales that occur under the current alliance agreement would be eliminated. This transaction is expected to favorably impact Fluke's earnings per share, beginning in the first year of operations.
 "We have had a productive alliance with Philips since 1987," said Bill Parzybok, Fluke chairman and chief executive officer. "All along, we have been evolving the alliance to optimize our performance and improve our position in a changing marketplace. It has become apparent to both companies that a unified management structure, aligned under a single mission, would accelerate our growth and success."
 Bill Whitward, director and general manager of Philips T&M, added, "Once we reached this conclusion, it was clear that Fluke, which is a focused electronic test tools company, should direct the merged businesses. We are convinced this merger would make the combined company more competitive and that it would be in the best interests of our customers and our employees. It also would fit well with Philips' process of constantly reviewing its product portfolio."
 Under the proposed agreement, Fluke would assume direct responsibility for worldwide marketing, development, manufacturing, sales and support of most of the combined companies' present product lines. This would include the acquisition of sales and service operations in Europe, and the management of the distribution network throughout the rest of the world. Fluke would acquire all T&M operations in Almelo and Heerlen, The Netherlands. Fluke would also acquire Philips' T&M product marketing and development operations in Eindhoven, The Netherlands, and Hamburg, Germany. The test and measurement activity in Kista, Sweden, would remain with Philips, although Fluke would take over responsibility for sales and service of its products worldwide. At the close of the transaction, approximately 900 Philips employees would transfer to Fluke.
 This proposed transaction is contingent upon several factors, including approval by Fluke shareholders and Philips board of management, and review by the appropriate social and regulatory organizations. Fluke expects to issue its proxy statement to shareholders in early November.
 Fluke's mission is to be the leader in compact, professional electronic test tools. Fluke focuses on customers in installation, maintenance, service, manufacturing test, and quality functions in a variety of industries. Founded in 1948 with headquarters in Everett, Fluke currently employs more than 2,200 people worldwide, producing revenues of $239.7 million in its most recent fiscal year, ended Sept. 27, 1991. Fluke is a publicly held company, traded under the symbol "FKM" on the American and Pacific stock exchanges.
 Philips Electronics is one of the world's largest electronics companies, with sales of $30.3 billion(U.S.) in 1991 and, as of June 30, 1992, 238,700 employees worldwide. Its products include lighting, consumer electronics, components, semiconductors, personal computers, communications systems, medical systems, industrial electronics, domestic appliances and personal care products. Its shares are traded on 19 stock exchanges in the world, including The New York Stock Exchange, and the stock exchanges in Tokyo, London and Amsterdam.
 -0- 8/26/92
 /CONTACT: Liane M. Woodward of John Fluke Mfg., 206-356-5566; or Cor Vreven, Philips N.V., Eindhoven, The Netherlands, 011-31-40-75-70-05/
 (FKM PHG) CO: John Fluke Mfg. Co. Inc.; Philips Electronics N.V. ST: Washington IN: CPR SU: TNM


SC-JH -- SE003 -- 3301 08/26/92 08:01 EDT
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Date:Aug 26, 1992
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