Philips further expands Home Healthcare Solutions with acquisition of aerosol therapy business of Medel In Italy

* Philips also acquires, in a related transaction, strategically important manufacturing facility in Guangdong, China for nebulizer compressor systems
* Transactions further strengthen Philips Healthcare’s emerging markets footprint and solidifies global leadership position in Home Healthcare

Amsterdam, the Netherlands and Parma, Italy – Royal Philips Electronics (NYSE:PHG, AEX:PHI) today announced it has acquired the aerosol therapy business of Medel SpA in Italy. In a related transaction, Philips also acquired a manufacturing facility in Guandong, China for nebulizer compressor systems and operations in Hong Kong. Medel is a privately held Italian distributor of nebulizer compressor systems and other home healthcare products. The acquired businesses have become part of the Respiratory Drug Delivery, or RDD, business unit within Philips Home Healthcare Solutions. Financial details of this agreement were not disclosed.

Today’s announcement marks Philips’ ambition to expand its Home Healthcare Solutions business, further cementing its global leadership position in this industry, and marks its growing industrial and commercial presence in high-growth healthcare markets in emerging economies. The addition of the Guangdong facility means another significant expansion of Philips Healthcare’s industrial footprint in China following the acquisition of the country’s second-largest patient monitoring company Shenzhen Goldway Industrial in April 2008.

Philips Home Healthcare Solutions CEO Don Spence, who in November 2008 succeeded former chief executive John Miclot, said: “When Philips acquired Respironics, the company also had a leading respiratory drug delivery business. Building upon that strength and fulfilling on our ambition to expand our high-growth compressor nebulizer systems franchise, we decided to acquire the aerosol therapy business of Medel which allows us to better serve the needs of our customers and their patients who suffer from asthma, chronic obstructive pulmonary disease (COPD), cystic fibrosis and other respiratory disorders.”

The acquired businesses, renowned for innovative design and manufacturing of miniature battery powered portables, includes the aerosol therapy business of Medel in Italy and the manufacturing and logistics operations for the global nebulizer business Melhk Ltd. in Hong Kong and its subsidiary Melmedical Co. Ltd. in China. The acquisition consolidates the leading position Philips Respironics has in the market with its MiniElite and MicroElite portable nebulizer compressors. Demand for compact, lightweight portable nebulizers is being driven by the active lifestyles of children with asthma and seniors with COPD with analysts estimating the global pulmonary drug delivery technologies market to grow between 7% and 9% in the coming period.

About Medel

Headquartered in Parma, Italy, Medel SpA is a privately-held manufacturer and distributor of home health products with approximately 70 employees. Founded in 1966, the family owned business is noted for innovative design and the quality manufacture of a broad range of aerosol therapy products and specialization in miniature battery powered portables.

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.

Forward-looking statements

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.