Billionaire Agnelli family takes 15% stake in Philips

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Italy’s billionaire Agnelli family has acquired a 15 per cent stake in Dutch conglomerate Philips in a roughly $2.6bn transaction, promising to back 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. Exor said it intended to be a “long-term minority investor”.

The investment has been welcomed by 132-year old Philips, once best known for its branded lightbulbs and whose bid to shift from electronics towards health technology has been affected by the recall of millions of the company’s respiratory devices.

The controversy, which was followed by a US investigation and the exit of its former chief executive, has led to its share price tumbling more than 60 per cent since April 2021.

John Elkann, the chief executive of Exor, 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 existing Philips shareholders would not be diluted. People familiar with the deal said it was valued at about €2.6bn.

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

Exor has a market capitalisation of €19.5bn and is the largest shareholder of Stellantis, Ferrari and CNH Industrial. 

Following its sale of Bermuda-based reinsurer Partner Re for €9.3bn in 2021, Exor began expanding into healthcare through a series of investments. It has acquired minority stakes in health groups such as France’s Institut Mérieux and Italy’s Lifenet.

“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.

The company has also invested in technology groups such as Welltec in 2016 and Uber rival Via Transportation in 2020. 

Last month Lingotto, the London-based investment company owned by Exor, poured millions into British chipmaker Optalysys.

Diversification has been at the heart of Elkann’s strategy following the merger of his family’s Fiat Chrysler Automobiles group with France’s Peugeot which created Paris-listed Stellantis.

Historically the Agnellis’ business was focused on the automotive sector. But the company has also invested in media, through Turin’s La Stampa newspaper, and sports, through the ownership of Juventus, as secondary businesses.

Exor, which still owns Juventus and has reacquired La Stampa from Italy’s billionaire De Benedetti family in 2020, is also an investor in The Economist. Its diversification strategy includes investments in luxury, such as its 24 per cent stake in French shoemaker Christian Louboutin.