Dutch technology giant Philips has announced plans to split into two separate businesses in order to capitalize on what it calls fundamental market changes. As part of the company's latest restructuring effort, Philips will merge its consumer electronics and health care divisions into a single unit while simultaneously positioning its lighting division as a separate entity.

In a press release on the matter, Philips chief Frans Van Houten said he appreciated the magnitude of the decision they are taking but the time is right to take the next strategic step for Philips as they continue their transformation.

By separating the lighting business, Philips will be better positioned to capitalize on changes happening in the lighting industry - specifically, the fact that value is shifting from individual products to systems and services.

As Reuters notes, the future of their lighting business is unclear at this time. The business could be sold off to investors or listed on the stock exchange but either way, the move is expected to bring better returns for investors.

Philips was founded 123 years ago when father and son team Frederick and Gerard Philips became one of the first incandescent light bulb makers. The company, responsible for inventing the modern day audio cassette and compact disc, rose to prominence by the 1960s but like many others, is trying to remain relevant in an ever-changing world.

The split is expected to take up to 18 months to complete, Philips said.