Aster DM Healthcare Ltd. is nearing an agreement to combine with closely held Quality Care India Ltd., people familiar with the matter said, in a deal that will create one of India's largest hospital chains.
Aster and Blackstone Inc.-backed Quality Care are finalizing details of a transaction that could be announced as soon as Friday, the people said, asking not to be identified because the matter is private. Shareholders of Aster are poised to own around 57 per cent of the combined entity, while investors in Hyderabad-based Quality Care would hold the remaining 43 per cent, the people said.
Aster's shares climbed as much as 4.4 per cent in early Mumbai trading to the highest in more than seven months, before paring some of the advance. They are on course for a sixth straight day of gains, taking their rally this year to more than 20 per cent. The Bengaluru-based company has a market value of $2.9 billion.
The merged company will have more than 10,000 beds, making it one of India's top hospital chains in terms of revenue and bed capacity, the people said. The deal would help the new company improve its profitability, growth potential and cost savings, they said.
A representative for Blackstone declined to comment, while Aster didn't immediately respond to a request seeking comment outside regular Indian business hours.
Blackstone was among several private equity firms and pension funds that have been considering a potential deal for Aster, people with knowledge of the matter said last year. The Economic Times reported in September that Blackstone-backed Quality Care and Aster were in advanced talks on a merger.
Founded in 1987 by Chairman Azad Moopen from a single clinic in Dubai, Aster has since expanded in the Gulf region and India, operating dozens of hospitals as well as hundreds of clinics and pharmacies. Earlier this year, the company separated its business in the Gulf from the India business.
