Mitsui & Co., Ltd. ("Mitsui", Head Office: Tokyo; President and CEO: Tatsuo Yasunaga) will acquire an additional 16% of the shares of one of Asia's largest private hospital groups, IHH Healthcare Berhad ("IHH"), from IHH's largest shareholder, a wholly owned subsidiary of Malaysia's Khazanah Nasional Berhad ("Khazanah"). The share purchase agreement have been entered into on November 28, 2018. The share purchase price is approximately MYR8.4 billion (approx. JPY230 billion), and the addition of the newly acquired shares to Mitsui's existing shares in IHH will increase its equity stake to approximately 32.9% on completion of the acquisition, making it IHH's largest shareholder. Mitsui's expected shareholding of approximately 32.9% in IHH on completion of the acquisition is based on the enlarged share capital of IHH after completion of the Acibadem Issuance (as defined below and which is a condition to the acquisition).
IHH is one of Asia's largest private hospital groups, operating 50 hospitals with a total of over 12,000 beds in nine countries, including Singapore, Malaysia, Turkey, and India. In addition to its flagship hospital business in providing advanced medical treatment, IHH also operates diagnostic laboratories, imaging centers, specialized clinics, and medical education facilities, providing a wide range of healthcare and healthcare-related services across a large part of Asia. In order to respond to ever-increasing healthcare needs, IHH plans to further expand its business, primarily in India and China.
Since Mitsui's investment in 2011, Mitsui has supported IHH's geographical and business expansion by introducing local partners and advanced healthcare-related services of developed countries. Also, Mitsui has been supportive of IHH's group management through the nomination of directors and secondment of employees. During the six-year period from 2011 up to 2017, both IHH's EBITDA and the number of hospital beds recorded more than a three-fold increase. Leveraging its comprehensive strengths, Mitsui will continue to support IHH's management.
In Mitsui's Medium-term Management Plan announced in May 2017, healthcare is selected as a targeted growth area. With the continuous population growth, it is projected that more than half of world's population will continue to be in Asia. Demand for medical care is rapidly increasing with economic growth and aging whereas Asia continues to face shortage of hospital beds and doctors. Additionally, change in lifestyle is causing chronic conditions to be a primary concern and there is an urgent need for sophistication of medical care and improvement in care quality.
Taking this macro-environment, Mitsui will build and expand its participation in Asia's largest healthcare ecosystem with IHH at its core. Mitsui will further support IHH' growth and also pursue opportunities that anticipates high growth, such as ancillary service business and other new business in areas such as disease prevention and management, telemedicine, and personalized medicine, by effectively utilizing digital transformation and innovative technology. Mitsui will contribute to further develop healthcare services in Asia in terms of access, quality and efficiency and contribute to creating a healthy society.
The acquisition has not completed and is subject to and conditional upon regulatory requirements in India and the completion of the issuance of new shares in IHH to Mehmet Ali Aydinlar, Hatice Seher Aydinlar and/or its nominee and Pulau Memutik Ventures Sdn Bhd, in its capacity as the nominee of Bagan Lalang Ventures Sdn Bhd (the "Acibadem Issuance").
We believe that the financial impact of the additional share acquisition to the fiscal year ending March 2019 should be limited.
1. Profile of IHH
|Name of Company||IHH Healthcare Berhad ("IHH")|
|Head Office||Kuala Lumpur, Malaysia|
|Representative||Dr. Tan See Leng|
|Business Activities||Operation and contracted management of hospitals, and healthcare services, including management of medical education facilities in Asia, Central & Eastern Europe, the Middle East and North Africa (CEEMENA)|
|Sales||MYR 11.1 billion (approx. JPY300 billion) / Fiscal Year ended December 2017|
|Total Assets||MYR 38.9 billion (approx. JPY1 trillion) / As of December 31, 2017|
|Shareholders & Equity Stake||Before Transaction||Khazanah approx. 41.6%, Mitsui approx.18.0%, other shareholders approx. 40.4%|
|After Transaction||Mitsui 32.9%, Khazanah 26.1%, other shareholders 41.0%|
2. Profile of Khazanah
|Name of Company||Khazanah Nasional Berhad ("Khazanah")|
|Head Office||Kuala Lumpur, Malaysia|
|Representative||Datuk Shahril Ridza Ridzuan|
|Business Activities||Government investment corporation administered by the Ministry of Finance of Malaysia for the purpose of strategic investment in new markets and industries|
|Assets||MYR 157.2 billion (approx. JPY4.2 trillion) / As of December 31, 2017|