Fortis to acquire 10 Wockhardt hospitals

Fortis Healthcare Ltd on Monday said it would acquire 10 hospitals of Wockhardt (WOCKPHARM.NS : 171.5 +1.1) Hospitals that includes four super speciality hospitals, three satellite hospitals and one medical institute each in Mumbai, Bangalore and Kolkata for Rs 909 crore. The medical institute in Kolkata and Bangalore are under construction. The business transfer is expected to be completed by December.

Following Monday's announcement, Wockhardt shares went up 8.87% on the Bombay Stock Exchange (^BSESN : 16632.01 -222.92) (BSE) to close at Rs 176.80. Fortis shares closed at Rs 116.05, up 6.57%.

In March this year, debt-ridden Wockhardt had decided to restructure its corporate debt. The company had said it will hive off its non-core businesses. According to Crisil, the company had a debt of Rs 3,777 crore as on December 31, 2008.

Earlier, Wockhardt sold its German business Espharma to Mova GmbH for an undisclosed amount. In June, Wockhardt sold its animal health division to French company Vetoquinol, again for an amount which it did not disclose.

With the acquisition, Fortis will have a capacity of 5,180 beds. Fortis already operates 28 hospitals across the country. Fortis will use Rs 350 crore from a proposed rights offer and debt to fund the acquisition, the company said. The acquisition will enhance Fortis' footprint in southern, western and eastern India.

Malvinder Mohan Singh, group chairman, Fortis and Religare Enterprises, said, "This landmark deal is an important milestone in the history of Indian healthcare as it brings together two leading brands to create a national healthcare delivery network. This partnership will enable the vast pool of medical talent and quality healthcare infrastructure under the Fortis network to deliver a superior value proposition to the citizens of our country."

The 10 hospitals are spread across metros in three states and will provide Fortis a pan-India presence consistent with its stated strategy. This acquisition will augment the bed capacity by 1,902 beds.

Wockhardt chairman Habil Khorakiwala said, "This has been a fair agreement through which, we believe Fortis will continue to deliver quality care and patient safety." He further added, "Wockhardt Hospitals is committed towards saving lives and will strive to reach new heights of medical excellence by way of its relationship with Partners Harvard Medical International." Post acquisition, Fortis' will have a talent pool of 9,250 personnel including 1,575+ doctors and 5,000 nurses and para-medics.