SYDNEY • Chinese state-owned conglomerate China Resources Group and Australian bank Macquarie Group plan to buy majority control of GenesisCare, laying the groundwork for Australia's biggest cancer and cardiac services provider to expand into the world's second-largest economy.
In a joint statement yesterday, Hong Kong-based China Resources and Australia's biggest investment bank said they will buy between 50 per cent and 74 per cent of GenesisCare, without saying how much they will pay. Private equity giant KKR is selling its 45 per cent stake as part of the deal, they said.
A person with direct knowledge of the deal told Reuters the takeover would give GenesisCare, which does not disclose annual revenue, an enterprise value of A$1.7 billion (S$1.73 billion). The person declined to be identified because he was not authorised to discuss the matter with the media.
Subject to both a shareholder vote and approval from Australia's Foreign Investment Review Board, the deal reflects new opportunities being explored by Australian and Chinese companies since a A$100 billion bilateral free-trade agreement took effect in December last year.
China Resources and Macquarie said Sydney-based GenesisCare's doctors and managers, who currently own 55 per cent of the company, will keep between 26 per cent and half the company, depending on how shareholders vote on the proposed buyout.
"GenesisCare... has developed a world-class model for cancer and cardiac care that we will help introduce to China and take around the world," China Resources deputy general manager Kerry Zhang said.
As the country's economy grows, China's ageing healthcare infrastructure is creaking under the strain, fuelling demand for new services.
The deal comes as GenesisCare, founded in the early 2000s, expands in several geographic directions. Now the biggest private cancer services provider in Britain and Spain, apart from Australia, GenesisCare says it treats more than 2,500 patients a day in more than 150 locations across those three nations, with over 2,000 medical and management staff.
But the sale may run into political opposition in Australia as it awaits clearance from the Foreign Investment Review Board. A general election earlier this month resulted in a small group of anti-globalisation independent lawmakers securing an influential role in Senate decision-making.
REUTERS
