Eyeing the health tech sector, Ferrari's major shareholder doubles down on the beleaguered Philips.
On Tuesday, as reported by the Financial Times, Exor, the holding company of Italy's premier Agnelli family and the largest shareholder of Ferrari, secured a 15% stake in Philips in a deal valued at around 2.6 billion euros.
Following the transaction, Exor's ownership in Philips will increase to 20%, and the company will gain a seat on Philips' board. Exor clarified its investment strategy as wanting to be a "long-term minority shareholder," reflecting strong support for Philips' transition from consumer electronics to health technology.
Of note, Philips, the central figure in this transaction, has been embroiled in a recall controversy surrounding its respirators, experiencing a dramatic stock price dip of over 60% in the past two years. Before the recall incident in April 2021, its market capitalization had shrunk by a staggering 68%.
Under the leadership of John Elkann, the fifth-generation head of the Agnelli family, Exor boasts a market capitalization of 19.5 billion euros and stands as the largest shareholder of Stellantis, Ferrari, and CNH Industrial.
Recently, Exor has expanded its investment horizons from the automotive industry to encompass healthcare, technology, and financial services. After selling the U.S. reinsurance company, Partner Re, for 9.3 billion euros in 2021, Exor ramped up its investments in the health sector, acquiring stakes in France's Institut Mérieux and Italy's Lifenet.
Worth noting, despite potential liability risks stemming from Philips' product recalls, the Agnelli family remains optimistic about Philips' future prospects. In a letter to shareholders penned in April this year, Elkann articulated Exor's bullish stance on Philips' future in the health tech domain, committing more resources.
Elkann conveyed his belief in Philips' recent transformation, blending the two areas of keen interest to Exor: health and technology. At present, Philips leverages artificial intelligence to auto-generate patient medical reports and has been pioneering collaborative diagnostic technologies.
