Philips transferred its mobile handset activities to CEC in October 2001 under an ODM agreement but retained an operation in Europe that currently has annual revenue of 400m euros ($501.8m) and employs 240.
Under the terms of the letter of intent, CEC will receive a global license to market and sell mobile phones under the Philips brand for the next five years.
No financial terms were given for the deal, which is expected to be completed by the end of 2006.
