Electrical appliance maker Philips said on Monday it is creating a stand-alone company by merging its LED and car lighting units.

Both businesses are ‘strong players in the lighting industry and ready to pursue more growth and scale independently of Philips Lighting,’ chief executive Frans van Houten said in a statement.

Van Houten said Philips expects energy-saving LED lighting to grow substantially and is also hoping to make gains in the ‘exciting’ car lighting market.

The new company, which will cost some €30m to set up, will be completed by the first half of next year and Philips is looking for third party investors.

The two units had combined sales of €1.4bn in 2013.