Philips announces completion of tender offer to acquire Respironics

14 March 2008

Royal Philips Electronics (NYSE:PHG, AEX:PHI) has announced the completion of the tender offer by its wholly owned subsidiary, Moonlight Merger Sub, Inc., to acquire all outstanding shares of common stock of Respironics, Inc. (NASDAQ:RESP) for $66.00 per Respironics share.

The offer had been extended several times since the announcement of the takeover in December 2007. By closure time yesterday Philips held over 94% of the outstanding shares of Respironics.

Respironics manufactures medical devices used primarily for the treatment of patients suffering from sleep and respiratory disorders.

On 5 March 2008 the European Commission cleared the acquisition, concluding that the operation would not significantly impede effective competition in the European Economic Area.

The commission concluded that the acquisition would result in some overlaps in the companies' activities in the markets for light therapy boxes and soothers (dummies) and create vertical links between, on the one hand, Respironics' OEM capnography components and Philips' critical care monitors and, on the other hand, between Philips' critical care monitors and Respironics' ventilation equipment used in hospitals.

Commenting on today’s announcement, Gerard Kleisterlee, President and Chief Executive Officer of Royal Philips Electronics, said: "For Philips, the acquisition of Respironics will be a major milestone towards completing our objective to build market leadership positions in high-growth, high-margin markets around our three sectors.

"Upon closing of this transaction, Respironics will become the centerpiece of our Home Healthcare business within Philips Healthcare and with that we have successfully built a significant operation that can facilitate the evident societal need to make home-based healthcare an integral part of the healthcare system."

Philips has been growing its Home Healthcare business in the US recently and has made a number of acquisitions, including Lifeline Systems, Health Watch and Raytel Cardiac Services.

Following the merger, Respironics will become an indirect wholly owned subsidiary of Philips, and Respironics shares will be delisted and will cease to trade on the NASDAQ National Market.

In January Respironics announced record sales for the second quarter of its 2008 financial year (ending Dec 31 2007) of $343.1 million, an increase of 19% over the second quarter of 2007.

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