Exor Becomes Largest Shareholder of Philips with 15% Stake

This article was last updated on August 14, 2023

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Exor Becomes Largest Shareholder of Philips with 15% Stake

Italian investment company Exor, owned by the Agnelli family who built the Fiat car brand, has acquired a 15% stake in Philips, making Exor the largest shareholder in the Dutch medical technology company. The investment of €2.6 billion solidifies Exor’s position in the health technology sector.

Commissioner Role and Long-Term Investment Strategy

Exor has also secured a seat on the Supervisory Board as part of the deal. The investment is part of Exor’s long-term strategy to invest in health technology companies. Last year, they invested in two smaller health tech firms. The Dutch Association of Effectenbezitters believes this investment will provide stability and restore peace at Philips, which has faced challenges with its apnea devices.

Philips’ Struggles With Apnea Devices and Lawsuits

Philips has faced difficulties for several years due to issues with its sleep apnea devices. These devices are meant to help patients with apnea breathe properly during sleep. However, some devices released foam particles that could enter users’ lungs, leading to numerous recalls and lawsuits. Currently, there are more than 500 lawsuits against Philips in the US.

The appointment of CEO Roy Jakobs last autumn brought about a shift in strategy, with a focus on recovery. Jakobs initiated a significant round of layoffs, which resulted in profits in the first six months of this year. Exor was impressed by Jakobs’ strategy and decision-making process, leading to their decision to become a major shareholder after discussions with Philips’ top management.

Positive Effects on Share Price and Market Stability

The news of Exor’s investment has had a positive impact on Philips’ share price, which rose almost 4% when the stock market opened in Amsterdam. The investment is expected to bring stability to the company and reassure shareholders. Gerben Everts, Director of the Dutch Association of Effectenbezitters, expressed pleasant surprise at the news, highlighting the importance of restoring peace at Philips.

Exor’s transparent approach to the acquisition through the stock exchange at a fair price has also been recognized. It is remarkable that Exor acquired such a large stake in one go, reflecting the attractiveness of Philips’ share price to new investors.

Exor’s Diverse Investment Portfolio

Exor, with a total investment of €33 billion in various companies around the world, holds interests in a diverse range of sectors. Aside from Philips, Exor has investments in Stellantis (the parent company of Peugeot and Opel), Juventus (a football club), Ferrari (a car manufacturer), and The Economist (a business magazine), among others. Their investment in health technology aligns with their commitment to investing in innovative and sustainable industries.

The acquisition of a major stake in Philips demonstrates Exor’s confidence in the future of the health technology sector and their long-term investment strategy in this field.