Malaysia’s IHH Healthcare Bhd, Asia’s largest hospital operator by stock market value, has acquired a controlling 51 per cent equity stake in Hyderabad-based Continental Hospitals Ltd for about Rs 281 crore (approximately $45.4 million), according to a stock market disclosure.
This marks a rare move by an international hospital firm to buy majority stake in an Indian healthcare provider. The fragmented hospitals business in the country is dominated by domestic firms and barring a few international healthcare chains like Aster DM Healthcare (whose Indian born founder built the business in the Middle East before expanding into India), Max Healthcare (co-promoted by South Africa’s Life Healthcare) and some in the single specialty segment.
IHH said the acquisition of Continental Hospitals, which has a 750-bed super specialty facility in Hyderabad, will not have any material effect on the group’s earnings and net assets for the current financial year ending December 31, 2015.
The deal was routed through a Singapore-based indirect subsidiary of IHH.
Founded by doctor turned entrepreneur Guru N Reddy, Continental Hospitals opened its first and only hospital in March 2013. A graduate from Osmania Medical College, he did his post graduation and super specialisation in gastroenterology, liver diseases, transplant hepatology and nutrition at Baylor College of Medicine in the Texas Medical Center in Houston, the US. He serves as chairman and managing director of the firm.
The deal marks an expansion of Malaysian sovereign wealth fund Khazanah’s interest in Indian healthcare sector. Khazanah, which is a minority shareholder in top Indian hospital chain Apollo Hospitals Enterprise Ltd, is also the single largest shareholder of IHH.
IHH also has two existing JVs with Apollo running a hospital Apollo Gleneagles Hospital in Kolkata and Apollo Gleneagles PET-CT Centre in Hyderabad.
The company which has operations in China, Malaysia, Singapore, Australia and now India, had also inked a deal to buy a Singapore-based unit of India’s Fortis Healthcare Ltd for $109 million. This deal, however, was nixed after Singapore’s Competition Commission blocked the proposed deal as it would have affected competition in the country. IHH already has a large presence in the Southeast Asian nation through Parkway.
(Edited by Joby Puthuparampil Johnson)