Mitsui eyeing reins of Fortis parent IHH

In a move that will help grab a large pie of India's private healthcare delivery infrastructure, Japan's Mitsui & Company is exploring a deal to take full control of Malaysian hospital group IHH Healthcare. IHH Healthcare runs 34 hospitals in India through Fortis Healthcare, Gleneagles Global Hospitals and Continental Hospitals.

The Malaysian group also has a presence in India's diagnostic market through Fortis subsidiary Religare Ltd.

According to a Bloomberg report, Mitsui & Company is exploring a deal to take a majority stake in Kuala Lumpurheadquartered hospital group IHH Healthcare and delist it from the stock exchanges of Singapore and Kuala Lumpur. Mitsui has reached out to Malaysian sovereign fund Khazanah Nasional, IHH's second largest shareholder, to pick up the latter’s 26 per cent stake in the company. Mitsui has a 32.9 per cent stake in IHH Healthcare through a subsidiary. As of now IHH Healthcare is run as an independent company.

It may be recalled that IHH Healthcare acquired a 31 per cent stake in Fortis Healthcare in August 2018 in a $1.1-billion deal, but could not make an open offer to acquire a 26 per cent more stake in Fortis, owing to a Supreme Court stay order secured by Japan's Daiichi Sankyo over its disputes with the Singh brothers, the erstwhile promoters of Fortis.

As per the report, a few private equity firms have approached the Japanese trading house to team up on the potential transaction to buy out IHH's other shareholders.

Mitsui had raised its stake in IHH in 2018 to 32.9 per cent, after buying additional 15 per cent shares in the hospital operator from Khazanah. The Japanese firm is now the single biggest shareholder in the company.

IHH, which is listed on the stock exchanges of Malaysia and Singapore, has a market value of $11 billion. IHH runs a total of 80 hospitals in 10 countries.

In India, IHH runs 34 hospitals, with 4,770 operational beds across Fortis Healthcare, Gleneagles Global Hospitals and Continental Hospitals. IHH had a 50-50 joint venture with Apollo Hospitals to operate Apollo Gleneagles Hospitals in Kolkata, but last December IHH entered into a share purchase agreement to divest its 50 per cent stake in this.

IHH, which has majority stake in Fortis Healthcare, plans to rebrand the Fortis chain as Parkway, the Malaysian healthcare chain owned by it, but this will now require permission from the Supreme Court.

Recently, IHH had also entered into a partnership with Bharat Biotech to provide Covaxin at its Gleneagles Global Hospitals in three locations in India—Bengaluru, Chennai and Hyderabad.