Press Release

Philips to acquire Brazil's leading X-ray manufacturer

Move positions Philips as leader in Brazil’s X-ray market and greatly extends company’s presence in key emerging medical equipment market

São Paulo – Leader in Medical Systems in Latin America, Royal Philips Electronics (NYSE: PHG, AEX: PHI) (“Philips”) and VMI-Sistemas Medicos (VMI) today announced Philips will acquire VMI, a Brazilian imaging diagnostic company based in Minas Gerais. The transaction is subject to regulatory approval, and is expected to close in the second quarter of 2007. No financial details on the transaction were disclosed.

 

“By acquiring VMI, Philips can offer customers in Brazil and across Latin America a more complete medical diagnostic imaging product portfolio. This is our first acquisition of a healthcare company in a developing economy and it endorses the company’s global strategy of focusing on healthcare and investing in emerging markets, looking for solutions especially developed to address local needs,” explained Mr. Steve Rusckowski, CEO of Philips Medical Systems.  Between 2003 and 2006, growth in the Brazilian market for medical diagnostic imaging and monitoring equipment has been robust, expanding at close to 20% per year, compared to annual growth rates in the global market of between 4 and 5%.

 

In Brazil, Philips enjoys a prominent position in the market for most types of medical imaging equipment. Through this acquisition, Philips will become a leader in general x-ray in Brazil. Furthermore, by capitalizing on VMI’s extensive distribution network – also for economy range products – Philips believes this move will further boost growth: “Through this deal, we can build on VMI’s extensive sales and services channels in Brazil to further increase Philips’ access to local customers and provide a benefit to hospitals through a wider product portfolio,” explained Mr. Daurio Speranzini, head of Philips Medical Systems in Latin America.

 

Since the first quarter of 2006, when Philips decided to start placing more emphasis on emerging markets and on solutions specially designed to address local needs, this is its first acquisition in a growth economy – Latin America. It is also a result of the company’s strategic orientation, which has been placing a stronger focus on the healthcare area. It will give Philips the opportunity of producing both analogical and digital x-ray equipment in Brazil and, as a result, offer more affordable solutions to the local market. Furthermore, the acquisition of VMI will help grow Philips’ overall presence in Latin America further, since Philips plans to boost VMI’s Brazilian exports to other countries in Latin America, which at the moment represent approximately 5% of VMI’s business.

 

VMI-Sistemas Medicos started in 1985 and has a factory in Lagoa Santa (MG). It has a strong presence in the analogical and digital x-ray market as well as in the cath-lab, mammography and ultrasound markets.

 

For more information, please contact:

Andre Manning

Philips Medical Systems

Tel. +1 646 508 4545

Email andre.manning@philips.com

 

For media inquiries, please contact:

Steve Kelly, Director, Public Relations
Tel: +1 425-487-7479
E-mail: steve.kelly@philips.com

Ian Race, Senior Manager, Public Relations
Tel: +1 978-659-4624
E-mail:  ian.race@philips.com

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 133,000 employees in more than 60 countries worldwide. With sales of US$42 billion (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.