Receive free Royal Philips NV updates
We’ll send you a myFT Daily Digest email rounding up the latest Royal Philips NV news every morning.
Italy’s billionaire Agnelli family has acquired a 15 per cent stake in Dutch conglomerate Philips in a roughly $2.6bn transaction, backing the group’s effort to shift away from consumer electronics to healthcare following a costly product recall.
As part of the deal announced on Monday, Exor, the Agnellis’ holding company, can increase its stake to 20 per cent and gain a seat on Philips’ board. Exor said it intended to be a “long-term minority investor”.
The investment comes as 132-year-old Philips, once best known for producing branded lightbulbs, shifts from electronics towards health technology — a move marred by the recall of millions of the company’s respiratory devices since 2021.
The controversy, which was followed by a US inquiry and the exit of its former chief executive, has led to its share price tumbling more than 60 per cent since April 2021.
For Exor, which has a market capitalisation of €19.5bn and is the largest shareholder of Stellantis, Ferrari and CNH Industrial, the deal marks a continued push into a more diverse pool of investments for a family once synonymous with the Italian car industry.
Exor has been expanding into healthcare following its sale of US reinsurer Partner Re for €9.3bn in 2021, acquiring minority stakes in health groups such as France’s Institut Mérieux and Italy’s Lifenet.
The company also has a 24 per cent stake in French shoemaker Christian Louboutin, and has in recent years invested in technology groups such as Welltec, in 2016, and Uber rival Via Transportation, in 2020. Lingotto, the London-based investment company owned by Exor, last month poured millions of pounds into British chipmaker Optalysys.
John Elkann, scion of the Agnelli dynasty and Exor’s chief executive, has gradually focused on expanding the company’s mix of investments, particularly since the merger of his family’s Fiat Chrysler Automobiles group with France’s Peugeot to create Paris-listed Stellantis in 2021.
The Agnellis’ business was historically focused on the automotive sector, alongside investments in Turin’s La Stampa newspaper and football club Juventus. Exor, which reacquired La Stampa from Italy’s billionaire De Benedetti family in 2020, is also an investor in The Economist.
Roy Jakobs, Philips’ chief executive, said Exor had engaged with the company in late 2022 and conducted its own analysis of the potential impacts of the recall.
“Reflecting on 2022, I can confidently share with you that our work on healthcare has reinforced our view that there are real opportunities for us in this sector and our interest has only grown,” Elkann wrote in a letter to shareholders in April.
Despite potential payouts for personal injury claims still looming over the company, he said this was “part of the package” that Exor had bought into, adding that the investment “shows their confidence in what we are doing and where we are taking the business”.
Jakobs said Philips was capitalising on demand from a healthcare sector under strain from a shortage of workers. He pointed to Philips’ use of artificial intelligence to help automate the production of patients’ medical reports, as well as its development of “command centres” with screens that help nurses watch multiple beds at the same time.
Elkann said: “The path of change taken by Philips in recent years has created a company that combines two areas — healthcare and technology — to which we are committed.”
Exor said it acquired the 15 per cent stake through “on-market” purchases of the stock and that existing Philips shareholders would not be diluted.
Credit: Source link
