The Competition Commission of Singapore (CCS) has raised competition concerns over the proposed acquisition of diagnostics services provider RadLink-Asia Pte Ltd by Parkway Holdings from Indian healthcare major Fortis Healthcare Ltd, according to a statement.
In September, Fortis Healthcare inked a deal to sell its entire holding in RadLink-Asia Pte Ltd and its subsidiaries to Medi-Rad Associates Ltd (Medi-Rad), an indirect wholly-owned subsidiary of IHH Healthcare Berhad, for S$137 million ($108.6 million).
RadLink is engaged in the provision of healthcare services including outpatient diagnostic and molecular imaging services in Singapore.
Parkway Holdings is a wholly owned subsidiary of Kuala Lumpur-based IHH Healthcare, whose largest shareholder is Malaysian sovereign fund Khazanah.
In Singapore, both Parkway and RadLink are engaged in the supply of radiopharmaceuticals, the provision of radiology and imaging services, and the provision of primary care clinics and services.
Based on the information furnished by Parkway Holdings, Fortis Healthcare, industry and third party during the phase-1 review, CCS reached on a conclusion that the proposed deal significantly reduces the number of providers of radiology and imaging services and the number of suppliers of radiopharmaceuticals in Singapore, and therefore requires further competition analysis, it said.
“The merger will accordingly proceed to Phase 2 review, upon CCS’s receipt of the relevant documents from the Parties,” CCS said.
This proposed deal would have marked another move by Fortis to disengage from its international expansion strategy, having previously sold assets in Hong Kong, Australia and Vietnam. Fortis had flipped its strategy of international expansion within one year of $665 million deal to buy assets owned by its promoters and now derives almost all revenues from India.
After buying some assets from its promoters in Asia Pacific it became the first Indian healthcare firm to build a strong overseas business. However, it took a u-turn from its previous strategy of going international, by selling its largest overseas healthcare assets in Vietnam, Australia and Hong Kong. The firm is now focusing on India. It also went asset light by spinning out physical assets into a Singapore-listed entity.
Earlier in 2010, Fortis promoters had also locked themselves into a takeover battle with Khazanah for Singapore’s Parkways. They had later pulled out from the battle and sold their own stake to Khazanah.
It was after this that it went about acquiring other firms in South East Asia and then lent its own public listed company Fortis to buy its privately held assets. Almost all of these overseas assets have now been divested.
(Edited by Joby Puthuparampil Johnson)