Philips Settles Sleep Apnea Machine Lawsuits for $1.1 Billion

Philips Reaches $1.1 Billion Settlement

• Philips has reached a $1.1 billion settlement in the United States to settle lawsuits over faulty sleep machines.

• The settlement resolves personal injury litigation and medical monitoring class action lawsuits related to the company's DreamStation machines for sleep apnea.

• Philips did not admit any fault or liability in the settlement.

Details of the Settlement

• The settlement includes a $479 million settlement for CPAP machine recalls.

• The settlement addresses claims filed in U.S. courts and other potential cases.

• Philips will fund the settlement payments through cash flow generation.

• Philips has booked a provision of 982 million euros ($1.05 billion) in the first quarter to cover the settlement.

• Philips also concluded an agreement with insurers to pay Philips 540 million euros to cover Respironics recall-related claims.

Impact of the Settlement

• Analysts believe the settlement is "much milder than feared" and will end litigation uncertainty.

• Shares in Philips surged by more than 33 percent on the Amsterdam stock exchange following the announcement.

• The settlement is a "significant milestone" for Philips and provides "further clarity on the way forward for the company."

• Philips has had to cut thousands of jobs and posted losses in recent years due to the recall of its sleep apnea machines.

• With the settlement, Philips believes it has "put behind us" the three biggest litigation cases it faced.