Philips has bowed out of the audio and video markets, selling its assets to Japanese company Funai Electric.

The Dutch firm is focusing on healthcare products and home appliances after receiving £130 million for its entertainment businesses, Digital Spy reported citing Reuters.

Philips is in the midst of extensive restructuring after recording losses of more than £300 million during the last three months of 2012.

The company's audio division will be absorbed by Funai by the end of the year, while its video business will not change hands until 2017.

Hong Kong company TPV acquired the manufacturer's cash-haemorrhaging television arm in March last year.

"With consumers going online for music, films and games rather than buying CDs and DVDs, Philips decided to get out of home entertainment even though it was profitable last year," Philips chief executive Frans van Houten said.

The company will focus on producing shavers, toasters, coffee makers, light bulbs and other home items as part of its restructuring plan.