Agnelli family’s Exor buys $2.8 billion stake in Philips

By Toby Sterling and Bart H. Meijer

AMSTERDAM (Reuters) -Dutch investment firm Exor NV, controlled by Italy’s Agnelli family, has bought a 15% stake in healthcare technology group Philips for about 2.6 billion euros ($2.84 billion), the companies said on Monday.

Exor becomes Philips’ largest shareholder and the deal is a welcome vote of confidence in the Dutch company, which is in the late stages of a huge product recall that began in 2021 and that knocked two thirds off its share price. Philips shares rose 5.1% to 19.43 euros by 0805 GMT, while Exor shares slipped 0.5% to 81.06 euros.

Exor, a long-term investor, purchased its stake on the open market. Under an agreement with Philips, it will take a seat on the company’s supervisory board and may later expand its stake to a maximum of 20%.

Exor is majority-owned by Giovanni Agnelli BV, the family vehicle of the founder of Fiat – Italy’s wealthiest family according to Forbes. Exor is the largest shareholder in companies including Ferrari, Stellantis and CNH Industrial.

Exor’s substantial investment underlines their confidence in Philips’ transformation into a healthcare technology company and its growth and value potential,” Philips Chairman Feike Sijbesma said in a statement.

On a call with journalists, Philips executives said Exor had been researching a possible investment since last year but the share purchases, which trigger disclosure requirements under Euronext rules, came together in just several days with assistance of an unnamed investment bank.

Exor said in April that it had about 6.5 billion euros available for investments and would focus on healthcare, luxury and technology businesses. Recent investments include stakes in healthcare group Institut Merieux and hospital manager Lifenet.

Analysts for ING said in a note that Exor’s investments currently focus on listed firms because they are “more interesting from a valuation perspective” than private markets, where values have not yet caught up with “reality.

Philips shares have rallied by 35% so far this year to close at 18.50 euros on Friday. That compares with more than 60 euros per share before the recall.

“On top of being a med-tech company, Philips is also perceived as a value stock, having been impacted by the Respironics recall saga,” ING said.

Philips has taken a 575 million euro provision for lawsuits related to the recall, and CEO Roy Jakobs said Exor has not received any information beyond what has been made public about its ongoing talks with the U.S. Department of Justice over a settlement.

Philips last month reported core profit of 453 million euros and slightly upgraded financial targets for the full year.

($1 = 0.9147 euros)

(Reporting by Toby SterlingEditing by Kim Coghill, David Goodman and Susan Fenton)