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In a transaction valued at approximately €2.6 billion, Italy’s billionaire Agnelli family has acquired a 15 percent stake in the Dutch conglomerate Philips. This move supports Philips’ efforts to shift its focus from consumer electronics to healthcare following a costly product recall. The deal allows Exor, the Agnellis’ holding company, to increase its stake to 20 percent and gain representation on Philips’ board. Exor intends to be a long-term minority investor.
Philips, once known for its branded lightbulbs, has been transitioning from electronics to health technology. However, the company has faced challenges due to the recall of its respiratory devices since 2021. This controversy, along with a US inquiry and the departure of its former CEO, has caused Philips’ share price to plummet over 60 percent since April 2021.
Exor, which has a market capitalization of €19.5 billion and is the largest shareholder of Stellantis, Ferrari, and CNH Industrial, sees this deal as part of its strategy to diversify its investment portfolio. The Agnellis’ company has been expanding into healthcare following the sale of US reinsurer Partner Re for €9.3 billion in 2021, acquiring minority stakes in health groups such as France’s Institut Mérieux and Italy’s Lifenet. Exor also holds a 24 percent stake in French shoemaker Christian Louboutin and has made investments in technology firms like Welltec in 2016 and Uber rival Via Transportation in 2020. Recently, Exor-owned Lingotto, an investment company based in London, provided substantial funding to British chipmaker Optalysys.
John Elkann, CEO of Exor and scion of the Agnelli dynasty, has been focused on expanding the company’s investment mix, especially after the merger of Fiat Chrysler Automobiles with Peugeot to form Stellantis in 2021. Historically concentrated in the automotive sector, the Agnellis’ business also includes investments in Turin’s La Stampa newspaper and Juventus football club. Exor, which reacquired La Stampa from the De Benedetti family in 2020, is also an investor in The Economist.
Roy Jakobs, Philips’ CEO, stated that Exor engaged with the company in late 2022 and conducted its own analysis of the potential impacts of the recall. In April, Elkann wrote a letter to shareholders expressing confidence in the healthcare sector and stating that their interest in it has only grown.
Despite the potential for personal injury claim payouts in the future, Jakobs stated that this is part of the investment package Exor has agreed to. He believes that the investment demonstrates Exor’s confidence in Philips’ direction and progress. Jakobs also highlighted Philips’ focus on capitalizing on the demand in the healthcare sector, which is facing a shortage of workers. He mentioned the company’s use of artificial intelligence to automate medical report production and the development of “command centers” to assist nurses in monitoring multiple patients simultaneously.
Elkann commented, “In recent years, Philips has successfully combined healthcare and technology, and we are committed to supporting this path of change.” Exor clarified that it acquired the 15 percent stake through on-market purchases and ensured that existing Philips shareholders would not be diluted.
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