Amsterdam, the Netherlands and Riyadh, Saudi Arabia – Royal Philips Electronics (NYSE:PHG, AEX:PHIA) and Al Faisaliah Medical Systems (FMS), a subsidiary of the Al Faisaliah Group, today announced that they have signed an agreement to set up a 50-50 joint venture to sell Philips’ Healthcare solutions and services in the Kingdom of Saudi Arabia. The proposed transaction is subject to governmental approval, certain contractual and other closing conditions, and is expected to close in the first half of 2013. Financial details of the agreement were not disclosed.

The joint venture will combine Philips’ strong Healthcare portfolio, including medical imaging systems, patient monitoring devices and clinical information solutions, with FMS’ recognized knowledge of the market requirements and strong position in Saudi Arabia, the largest economy in the Middle East by GDP. The Saudi Arabian healthcare market is estimated to grow by 8% annually between 2013 and 2017, driven by targeted government spending on health services and hospital infrastructure.

“Through the partnership between Philips and Al Faisaliah Medical Systems, we combine Philips’ clinical expertise and innovations, with Al Faisaliah Medical Systems’ thorough knowledge of local customer needs and requirements, supported with our talented staff and strong infrastructure,” said Mohammed bin Khaled Al Abdullah Al Faisal, President and Chief Executive Officer of the Al Faisaliah Group. “We expect that the joint venture will contribute to new levels of healthcare services for the people of Saudi Arabia.”

“By partnering with Al Faisaliah Medical Systems in a joint venture, Philips can accelerate its growth in the important Saudi Arabian market for healthcare products, services and solutions,” said Philips Chief Executive Officer Frans van Houten. “We have built a strong and trusted relationship with FMS over the past 40 years, and with this joint venture we are now taking the next step to address important healthcare opportunities in a growth market.”

The joint venture with FMS builds on Philips’ ambition to better serve the needs of local markets and respond to the specific healthcare needs of the population in Saudi Arabia. In addition, the joint venture will facilitate a focus on developing the next generation of skilled Saudi healthcare professionals through dedicated education and training programs.