Fortis Healthcare Ltd said on Tuesday it would sell its hospital business to TPG-backed Manipal Hospitals Enterprises Private Ltd.
This deal will create the largest provider of healthcare services in India by revenue.
The Board has also approved sale of its 20 percent stake in diagnostics chain SRL Ltd to Manipal Hospitals.
Ranjan Pai will become the largest investor with a 37.9% stake in post-merger Manipal Hospitals and US-based private equity firm TPG Capital will follow with 20%.
The erstwhile promoters of Fortis Healthcare, Malvinder and Shivinder Singh, will have a 0.3% stake, down from about 0.8% now.
The resultant entity Manipal Hospitals will be a publicly traded company listed on NSE and BSE.
The remaining part of Fortis Healthcare will be an investment holding company with 36.6 percent stake in SRL.
The investment will also support the proposed acquisition of hospital assets owned by RHT Health Trust and the growth of the hospitals and the diagnostics businesses, Fortis said.
Fortis’ main backers, Malvinder Singh and Shivinder Singh, resigned from its board last month following legal troubles related to the sale of their stake in Ranbaxy to Japan’s Daiichi Sankyo Co Ltd.
As part of the transaction, Pai and TPG will invest Rs 3,900 crore in Manipal Hospitals. The funds will be used to finance the acquisition of the SRL stake.