Medical equipment and technology firm Philips said on Tuesday it will spin off its lighting division, the world's largest maker of lights, in an initial public offering of shares.
CEO Frans van Houten said it was an "historic" decision for Philips, which began as a lighting company in 1891. Analysts have valued the unit as being worth roughly 5 billion euros ($5.8 billion).
Philips Lighting has strong positions in the LED market, which now makes up more than half of sales, and sees future growth in networked, programmable LED lights which will make up part of the much-hyped "Internet of Things."
Philips Lighting had operating profit of 331 million euros in 2015 on sales of 7.47 billion euros. As a standalone company it will carry around 950 million euros of debt, Philips said.
Philips said it would sell a stake of at least 25 percent in the new company during the IPO, which will take place on Euronext Amsterdam. The exact timing will depend on market conditions, the company said.
Eric Rondolat, the chief executive of Lighting, will continue to lead the company through its IPO, Philips said.
Philips had also considered selling the division to a Chinese buyer or private equity firm but said last week it would likely reject those possibilities.