AMSTERDAM (Reuters) - Philips Electronics (PHG.AS: Quote, Profile, Research) will transfer its struggling North American television business to Japan's Funai Electric (6839.OS: Quote, Profile, Research) and expects to take charges totalling 125 million euros ($197 million) in 2008.

The brand licensing agreement that runs for a minimum of five years covers the sourcing, distribution, marketing and sales of all Philips consumer TV activities in the United States and Canada, Philips said in a statement on Tuesday.

Philips' global TV business generated 6.27 billion euros in revenue in 2007, but booked an operating loss of 71 million euros. Its North American TV sales amounted to 1 billion euros in 2007.

"This agreement secures continued presence of Philips and Magnavox branded TVs in North America in a model that safeguards Philips profitability in this highly competitive market," Philips said.

Philips said it will focus its TV business on the strongest markets, especially in Europe and in key emerging countries.

"As a premium brand, Philips will add lustre to our existing portfolio," Funai Electric Chief Executive Tetsuro Funai said in a statement.

The Amsterdam-headquartered company said in January it would look into all options for its TV business that is suffering from tough competition, especially in the United States, from low-cost rivals such as Taiwanese Amtran's (2489.TW: Quote, Profile, Research) Vizio brand.

Philips Chief Executive Gerard Kleisterlee said at the time that it would go for "higher margins, at whatever sales level the higher margins will come."

Philips said it will receive royalty payments from Funai for the use of its Philips and Magnavox brand names.

(Reporting by Niclas Mika; Editing by David Cowell)