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Philips buys Marconi unit
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July 4, 2001: 5:22 a.m. ET
Dutch electronics giant pays over $1 billion for Marconi medical systems
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LONDON (CNN) - Dutch electronics group Philips said on Wednesday it agreed to buy the medical systems business of the UK's Marconi for $1.1 billion.
Marconi's (MONI) medical systems includes a medical imaging business and a healthcare products unit, which Philips said in a statement it would sell after the deal is closed in the third quarter.
Marconi announced in March it was seeking a buyer for the medical systems business.
The sale of the unit is its second-biggest disposal to date. Marconi sold a defense business to BAE Systems for £7.7 billion in November 1999.
The UK-based company has sold businesses worth more than £9 billion ($12.9 billion) as it raises funds to turn itself into a purely high-speed telecoms equipment company.
The Philips acquisition of the medical systems business makes the Dutch company the world's second-largest maker of medical diagnostic imaging equipment.
The Amsterdam-based company said it will sell Marconi's healthcare products business, one of the largest distributors of radiology imaging supplies in the U.S.
Philips, Europe's biggest consumer electronics company and third-largest semiconductor maker, said the acquisition combined with that of U.S. Agilent Technologies' Healthcare Solutions Group, which it bought earlier this year, will give Philips Medical Systems annual sales of about  5 billion.
The range of products that fall under the umbrella of Philips Medical Systems include, X-Ray equipment, Ultrasound equipment and CT scanners.
In addition to acquiring Marconi's medical systems, Philips agreed to enter a five-year supply agreement under which Philips will buy up to $150 million of Marconi's communications goods.
Shares in Philips fell 1.1 percent to 31.07 in Amsterdam morning trading. Europe's main bourses were all in negative territory after numerous profit warnings from U.S. technology companies.
Meantime, shares in Marconi (MONI) were suspended at the request of the company ahead of trading statement later in the session.
The Board of Marconi will meet later, although the company declined to give further details. 
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