Philips further expands Healthcare business in emerging markets by acquiring India-based Meditronics
* Acquisition leads to significant expansion of Philips Healthcare’s industrial and commercial footprint in India
* Fifth consecutive acquisition of Philips Healthcare in emerging markets since mid-2007 and the second acquisition in India within the last three months
Amsterdam, the Netherlands and Mumbai, India – Royal Philips Electronics (NYSE: PHG, AEX: PHI) today announced it has reached an agreement to acquire India-based Meditronics, a leading manufacturer of General X-Ray systems targeting the economy segment in India. Upon closing of this transaction in the fourth quarter of 2008, which is subject to certain contractual and other conditions such as regulatory approvals, Meditronics will become part of the Imaging Systems business within Philips’ Healthcare sector. Financial details of this agreement were not disclosed.
Today’s announcement marks Philips’ growing presence in high-growth healthcare markets in emerging economies, and follows the earlier acquisitions of healthcare companies Alpha X-Ray Technologies in India, Chinese Shenzhen Goldway Industrial and Dixtal Biomédica e Tecnologia and VMI Sistemas Medicos in Brazil. In commenting on the deal, Philips Chief Executive Officer Gerard Kleisterlee said: “The acquisition of Meditronics, just two months after we announced the acquisition of Alpha, highlights our accelerating efforts to expand our healthcare business in emerging markets and India in particular. This underlines our conscious decision to step up investments in these high-growth areas while also delivering on our commitment to supply affordable healthcare solutions in emerging markets.”
Meditronics’ high-quality proven economy segment product portfolio complements Philips’ existing high-end General X-Ray range and further strengthens Philips’ leading position in India’s high-growth imaging and monitoring equipment market. Analysts estimate that the General X-Ray segment of the Indian market will show annual growth rates of 10% or higher. Philips will invest to expand sales in the local Indian market and will leverage its global distribution network to expand its offering of economy X-ray products in other emerging and, importantly, mature markets.
Today’s announcement is Philips’ second acquisition within the last three months of a healthcare equipment maker in India specialized in supplying products for the economy segment - one of the fastest growing market segments in the global healthcare equipment market. Philips announced in early September the acquisition of Alpha, a leading manufacturer of Cardiovascular X-Ray systems. Analysts estimate the economy segment of the global Cardiovascular X-Ray market shows annual growth rates of 10% to 15%.
“Executing on our strategic decision to scale up our presence in emerging markets has been an important element of Philips’ transformation into a focused, less-cyclical company in recent years,” said Mr. Kleisterlee. “We are committed to continue this course of action by increasingly redirecting resources to help fuel growth in emerging markets, and build out our industrial footprint in this cost-effective and high-quality manufacturing environment - for Healthcare, but also for our Consumer Lifestyle and Lighting sectors.”
Under the stewardship of Mr. Kleisterlee, Philips has transformed in recent years into a much simpler and more focused company dedicated to leveraging its deep consumer insight, technological prowess and innovative strength to deliver uniquely differentiating propositions to businesses and consumers. Philips’ focus on becoming the leading brand in Health and Well-being is perfectly aligned with important demographic and economic trends, while also tapping into the people’s increasing demand for advanced but easy-to-use products and solutions that improve the quality of their lives.
About Royal Philips Electronics
Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is a diversified Health and Well-being company, focused on improving people’s lives through timely innovations. As a world leader in healthcare, lifestyle and lighting, Philips integrates technologies and design into people-centric solutions, based on fundamental customer insights and the brand promise of “sense and simplicity”. Headquartered in the Netherlands, Philips employs approximately 128,000 employees in more than 60 countries worldwide. With sales of EUR 27 billion in 2007, the company is a market leader in cardiac care, acute care and home healthcare, energy efficient lighting solutions and new lighting applications, as well as lifestyle products for personal well-being and pleasure with strong leadership positions in flat TV, male shaving and grooming, portable entertainment and oral healthcare. News from Philips is located at www.philips.com/newscenter.
Meditronics is a leading General X-Ray manufacturer in India with a strong focus on surgery (mobile C-arms) and radiography (RAD). Headquartered in Mumbai, Meditronics employs around 150 employees working in research and development, sales and marketing, and in four industrial sites in India. Meditronics, founded in 1979 by two X-Ray service engineers, is one of the pioneers of the Indian medical technology industry. More information can be found at www.meditronics.co.in/about_us.asp.
This release may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.
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