Sime Darby Berhad (“Sime Darby”) today announced that its wholly-owned subsidiary Sime Darby Holdings Berhad (“SDHB”) has entered into a sale and purchase agreement (“SPA”) with Columbia Asia Healthcare Sdn Bhd (“Columbia Asia”) for the disposal of its interest in Ramsay Sime Darby Health Care Sdn Bhd (“RSDH”) for RM5.7 billion, marking its exit from the healthcare business.
RSDH is a 50:50 joint venture between Sime Darby and Ramsay Health Care Limited (“Ramsay”). Sime Darby had on 28 June 2023 announced that it was exploring the sale of RSDH together with Ramsay. Following this, various potential buyers, including Columbia Asia, were invited to participate in a bidding process which had recently concluded.
Columbia Asia is a Malaysia-based international private healthcare company and a wholly-owned subsidiary of Columbia Asia Healthcare Pte. Ltd. (“CAHSG”). CAHSG is 99.9% owned by HLT Healthcare Holdings Limited, which in turn, is jointly owned by Malaysian conglomerate, the Hong Leong Group and One Health Holdings (“OHH”), which is owned and controlled by TPG-managed funds. TPG-managed funds will invest in this transaction together with several co-investors via OHH. Other than TPG and the Hong Leong Group, the Employees Provident Fund of Malaysia and a wholly-owned subsidiary of the Abu Dhabi Investment Authority, will be the two largest providers of new capital which will be used to fund the transaction. Post transaction, both these OHH co-investors will have a combined shareholding of approximately 25% in OHH.
Columbia Asia and its subsidiaries have 22 medical facilities across Asia with 14 of them in Malaysia.
SDHB, together with AH Holdings Health Care Pty Ltd (“AHHC”), a subsidiary of Ramsay, entered into the SPA with Columbia Asia for the disposal of 100% equity interest held in RSDH for a cash consideration of RM5.7 billion.
The deal will enable Sime Darby to unlock the value of its healthcare assets, which have previously been deemed non-core, with a RM2 billion gain on disposal. The deal will allow Sime Darby to streamline its portfolio and provide capital for it to continue to further strengthen its core businesses of Industrial and Motors.
RSDH’s principal activities are in the management of hospitals and provision of healthcare-related services. It operates four hospitals in Malaysia and three hospitals in Indonesia.
“While the hospital business is a great asset, we have always maintained our focus on our core trading businesses of Motors and Industrial. The offer from Columbia Asia was one we could not refuse,” said Sime Darby’s Group Chief Executive Officer Dato’ Jeffri Salim Davidson.
“Our hospitals have grown in number and size and have won many accolades and awards in the last 38 years, growing from strength to strength providing top quality healthcare. I would like to express my appreciation to those who have been with us through this journey,” added Dato’ Jeffri.
YAM Tunku Ali Redhauddin ibni Tuanku Muhriz, Columbia Asia Director and TPG Senior Advisor, said, "RSDH has a unique platform of hospitals with a long history of excellent patient care for the communities that it serves in Malaysia and Indonesia.
“This will greatly complement Columbia Asia, and we look forward to working with the doctors, nurses and other colleagues from both RSDH and Columbia Asia to continue contributing to healthcare ecosystems in Malaysia, Indonesia and Vietnam.”
Datuk Seri Amir Hamzah Azizan, Chief Executive Officer of EPF said "EPF is pleased to be able to work with both Columbia Asia and TPG on this investment. We are excited to be part of Columbia Asia's next phase with the acquisition of RSDH’s hospitals. This investment is in line with our belief in the supportive long-term tailwinds for the healthcare sector in Malaysia, driven by growing disposable incomes and significant under-penetration of health services.”
Sime Darby expects the SPA to be completed in the third quarter of FY2024, subject upon approvals from the relevant regulatory authority.
Sime Darby entered the healthcare business with the acquisition of Subang Jaya Medical Centre, or then known as Penawar, from United Estates Projects Berhad in 1985. In 2013, Sime Darby and Australia-based Ramsay set up the joint venture to create Ramsay Sime Darby Health Care.