(Bloomberg) — The Agnelli family’s Exor NV has bought a minority stake in Dutch medical technology company Koninklijke Philips NV, which is still operating through an expensive product recall, as part of a plan to expand into healthcare.

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Philips stock was up 5.3% in early Amsterdam trading, and has gained 45% this year.

Exor, a holding company, has bought a 15% stake in Philips through a market share purchase and an agreement with a major financial institution, according to a statement released Monday. A Philips spokesman said the deal was worth around 2.6 billion euros ($2.8 billion).

While Exor does not plan to buy more Philips shares in the short term, the deal allows the company to increase its stake to a maximum of 20% of Philips’ outstanding common share capital, according to the agreement. Under the leadership of John Elkann, Exor has diversified its investments in recent years beyond the automotive industry into technology and luxury. Exor’s net asset value was around €28 billion at the end of December.

“The path of change that Philips has taken in recent years has created a company that brings together two areas – healthcare and technology – that we are committed to,” Elkann, the billionaire family leader and CEO of Exor, said in the joint statement. .

Read more: Philips says most devices recalled are unlikely to harm health

Company executives said on a media call that Exor’s investment is “positive and supportive” of Philips’ management team and business plan. Chief Executive Officer Roy Jacobs said the deal would not add additional liquidity to Philips.

Philips, a maker of ventilators and electrocardiographs, has been grappling with uncertainties surrounding the recall of millions of medical devices to treat sleep apnea since June 2021. The company has earmarked around €1 billion to recall around 5.5 million devices and booked additional provisions of €575 million as part of From a planned settlement in the United States to compensate patients. While shares have recovered this year, they still trade for less than half their mid-2021 price.

The Agnelli family owns 53% of Exor through a separate holding company named after Fiat founder Giovanni Agnelli that includes dozens of his descendants as investors. Exor also controls sports car maker Ferrari and Juventus Football Club and owns stakes in car maker Stellantis, as well as The Economist Group.

Exor raised $9 billion last year by selling reinsurer PartnerRe to France’s Covea. The holding plans to focus on expanding in health and wellbeing, as well as on technology.

(Updates with posts in a second, Philips CEO comment in sixth paragraph)

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