Philips to Purchase Marconi Medical Unit

Royal Philips Electronics, Europe’s largest consumer-electronics maker, agreed to buy Marconi’s medical systems business for $1.1 billion to become the world’s No. 2 maker of diagnostic-imaging equipment.

Marconi’s unit, with $1.6 billion in sales in fiscal 2001, will bolster Philips’ line of equipment to provide internal images of the body. Philips, based in Amsterdam, will have spent more than $5 billion in two years to catch up with General Electric Co. in medical systems. London-based Marconi is selling assets to focus on telecommunications gear.

“It’s a very cheap price for Philips,” said Bert Maes, an analyst at Delta Lloyd Securities who rates Philips shares “hold.” “Marconi needs the money.”