IHH Healthcare has announced its acquisition deal of Fortis Healthcare, the second largest health group of India via a deal that’s worth $585 million or 40 billion INR.
This acquisition lets the Malaysian health group expand its presence in India, which is one of its four major markets in Asia. IHH considers the country as one of its home markets, with the other three being Singapore, Turkey, and of course its homeland Malaysia.
The deal involves 170 INR per share and subscription of new shares of 31.1% of Fortis. As for the Indian health group, it comes as an immediate funding required to withstand its present cash-strapping circumstances.
As IHH says in its filing to the stock exchange, the deal bears a compulsory purchase offer of up to 26% of additional stake in Fortis that entails the same amount, 170 INR per share. This has a refinance of debt to an extent of US$ 25 billion!
The transaction is supposed to be completed within 7 business days of receiving of approvals from shareholders and CCI (Competition Commission of India). Both types of approvals will be received at the same time that can take about 60 to 75 days.
IHH had to beat Manipal Healthcare Enterprises to accomplish this deal with Fortis. Manipal Healthcare Enterprises is from the Indian state Karnataka and was offering 160 INR per share. It was reported that both the bidders in the final round had revised their bids downward and that IHH’s offer was unanimously accepted by the board of Fortis.
IHH is at present Asia’s largest health group in terms of market capitalization, running more than 10,000 licensed beds in 49 hospitals that are spread across 9 countries in the continent. It is as well the second largest in the world, providing integrated healthcare services.