(Bloomberg) — The Agnelli family’s Exor NV bought a minority stake in Dutch medical technology company Koninklijke Philips NV, which is still working through a costly product recall, as part of a plan to expand in health care.
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Philips rose 5.3% in early Amsterdam trading, taking gains this year of 45%.
Exor, a holding company, bought a 15% stake in Philips through on-market share purchases and an agreement with a major financial institution, according to a statement Monday. The deal is valued around €2.6 billion ($2.8 billion), a Philips spokesperson said.
While Exor does not plan to buy further Philips shares in the short term, the deal allows the company to increase its stake to a maximum of 20% of Philips’ outstanding ordinary share capital, according to the agreement. Under the leadership of John Elkann, Exor has been diversifying its investments in recent years beyond the car industry to tech and luxury. Exor’s net asset value totaled about €28 billion at the end of December.
“The path of change taken by Philips in recent years has created a company that combines two areas – health care and technology – to which we are committed,” said Elkann, the billionaire family’s leader and Exor’s chief executive officer, said in the joint statement.
Read more: Philips Says Most Recalled Devices Unlikely to Harm Health
Exor’s investment is ‘positive and supportive’ of the Philips management team and its business plan, company executives said on a media call. The deal won’t add additional liquidity for Philips, Chief Executive Officer Roy Jakobs said.
Philips, a maker of ventilators and cardiographs, has been grappling with uncertainties surrounding a recall of millions of medical devices to treat sleep apnea since June 2021. The company has set aside around €1 billion to recall around 5.5 million devices and booked additional provisions of €575 million as part of a planned settlement in the US to compensate patients. While shares have recovered this year, they’re still trading at less than half the price of mid-2021.
The Agnelli family owns 53% of Exor through a separate holding company named after Fiat founder Giovanni Agnelli that includes dozens of his descendants as investors. Exor also controls sports carmaker Ferrari, Juventus Football Club and owns stakes in carmaker Stellantis, as well as The Economist Group.
Exor last year cashed in $9 billion through the sale of reinsurer PartnerRe to France’s Covea. The holding plans to focus on expansion in health and luxury, as well as on technology.
(Updates with shares in second, Philips CEO comment in sixth paragraph)
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