Aster DM Healthcare eyes Abu Dhabi expansion after taking majority stake in Saudi hospital

Dubai’s Aster DM Healthcare has set its sights on Abu Dhabi after raising its stake in a Saudi hospital on Sunday.

Aster DM has five greenfield projects being built in the region that will add about 400 hospital beds. They are Aster Hospital Abu Dhabi, Medcare Palace on Sheikh Zayed Road, Medcare Hospital in Sharjah, Aster Hospital in Al Qusais, and one in Qatar.

The company, however, declined to provide details about the Abu Dhabi project.

Aster DM Healthcare on Sunday acquired an additional 57 per cent stake in Sanad Hospital in Riyadh for Dh900 million, lifting its ownership to 97 per cent.

It now owns six hospitals in the Arabian Gulf.

The group is preparing for an initial public offering this financial year but the company declined to provide updates.

With its latest move, Aster DM Healthcare joins NMC Healthcare and Mediclinic in the UAE in increasing their pace of mergers and acquisitions.

Last week, NMC Healthcare joined Johannesburg-listed Mediclinic in seeking to acquire the London-listed Al Noor Hospitals Group.

The Sanad Hospital in Riyadh has 250 beds, more than 100 doctors and surgeons, as well as 800 employees – of which Saudi nationals comprise 30 per cent.

“Our financial injection will help to accelerate Sanad Hospital’s expansion plans,” said Dr Azad Moopen, the chairman of Aster DM Healthcare.

It would add 100 inpatient beds, two buildings and upgrade the main building to accommodate more emergency rooms and outpatient clinics, according to Alisha Moopen, the company’s director of strategy.

Mergers and acquisitions involving Middle Eastern investors reached US$33.7 billion during the first nine months of this year, up 23 per cent year on year, according to Thomson Reuters and Freeman Consulting Services. It marks a record since 2010. Outbound mergers and acquisitions drove deal activities.

Although Qatar’s overseas acquisitions accounted for 55 per cent of Middle Eastern outbound mergers and acquisitions during the first nine months of the year, those by UAE companies accounted for 11 per cent.

Aster DM Healthcare, which acquired a 40 per cent stake in Sanad Hospital in December 2011, also has healthcare facilities in India, Jordan and the Philippines.

According to a Colliers report in 2012, Saudi Arabia had the lowest number of beds, nurses and doctors per 1,000 people in the Arabian Gulf.

“By combining forces and bringing together a group of clinics and hospitals, the talent pool can be shared within the provider group and it would create synergies within the group and for the health sector,” Ahmed Faiyaz, a healthcare analyst with the consultancy EY, said of Aster DM Healthcare’s investment move.

As of 2012, Saudi Arabia had 420 hospitals, of which 130 were run by the private sector, according to a report from the King Abdullah International Medical Research Center and Saudi Arabia’s National Guard Health Affairs.

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