Royal Philips Electronics NV, one of the largest electronics companies in the world and the biggest producer of patient-monitoring systems, announced it has agreed to acquire medical-equipment manufacturer Respironics Inc. for 3.6 billion euros ($5.2 billion). This will be the biggest acquisition in Philips’ history.

The company founded and headquartered in the Netherlands said in an e-mailed statement today it will pay $66 per share in cash. Philips increased its offer by 24 percent compared with yesterday’s closing price.

Respironics, a Murrysville, Pennsylvania based company, produces machines used in patients' homes in the treatment of chronic breathing disorders and aid sleep.

This latest agreement increases Philips's acquisition spending to more than 10 billion euros in the last two years.

The company’s CEO, Gerard Kleisterlee, is using proceeds from selling semiconductor holdings to sustain the medical and lighting divisions and return cash to shareholders.

In its latest forecast, Philips predicted its operating profit will at least double by 2010.

"This is a sensible move. It's a clear step in home care, which is growing fast and the margins are high,'' said Rene Verhoef, an analyst at Fortis in Amsterdam, for Bloomberg. He recommended inventors to buy Philips stock.

Kleisterlee added in his statement that Respironics is “an excellent strategic fit” that would add to the increase in health care both in the hospital and in the home.

According to Philips, Respironics recorded approximately US$1.2 billion in sales over the year ended Sept. 30, and was growing both sales and margins at close to 20 percent per year.

Respironics' main revenue comes from selling devices that people with respiratory problems use in the home to diagnose or treat sleep breathing problems and there are millions of people suffering from Sleep Apnea – a disease in which breathing temporarily stops during sleep.