MUMBAI: IHH Healthcare Berhad, the world's second largest healthcare service provider by market value, has acquired 51% stake in Hyderabad-based Continental Hospitals, a 750-bed super specialty facility, for about Rs 300 crore.
Kuala Lumpur-based IHH owns Singapore's Parkway, Mount Elizabeth and Gleneagles hospitals and is considered as the Asia's largest vertically integrated healthcare chain, listed on Bursa Malaysia and SGX. Malaysia's sovereign wealth fund Khazanah Nasional is the majority owner of IHH, with a footprint extending from Turkey to Vietnam.
The deal to buy Continental Hospitals marks IHH's first direct acquisition in India, even though it owns a 10.5% stake in Apollo Hospitals and operates two joint venture facilities with the latter in Kolkata and in Hyderabad. The acquisition signals IHH's bigger push into Indian market where spending on healthcare is expected to remain buoyant on the back of changing lifestyles and rising income.
Investment bank Veda Corporate Advisors advised on the transaction. "The acquisition is in line with IHH's stated strategy of focusing on key emerging markets in Asia. We view significant growth potential for premium quality healthcare services in India given the large demand-supply mismatch," said Dr Tan See Leng, managing director and group CEO of IHH.
In India, IHH, which counts Parkway Pantai Group as its crown jewel, could follow a similar strategy of integrating primary, secondary and tertiary care services. "We would follow the same integration model, but we are starting with tertiary with which we are most comfortable here at the moment," said Ramesh Krishnan, head of Middle East and South Asia Operations for Parkway Pantai.
IHH, which trails only US-based HCA Holdings in market value of listed healthcare chains, acquired Parkway Holding after a prolonged takeover battle with India's Fortis Healthcare. It merged all the healthcare assets, including Pantai in Malaysia, under a single platform before a public listing in 2012.