A wholesome deal?

With the recent acquisition of 23.9 per cent of Parkway Holding for a price of $959 million, Fortis Healthcare has become the biggest private healthcare company in South Asia. This stake was purchased from the private equity firm TPG Capital, which is Parkway's single-largest shareholder. After this deal, Fortis intends to seek four directors on the board of Parkway. It will also nominate Malvinder Mohan Singh as chairman. Parkway Holdings is a leading provider of healthcare services across South Asia. The company is listed on the Singapore Stock Exchange. Pros and cons Analysts have divergent views about the acquisition. Some consider it unnecessary since there is a lot of scope for growth within India. Others disagree. According to Rashes Shah, Pharma analyst at ICICIdirect, a brokerage firm, “Though the hospital market in India has seen very low penetration (0.9-1 bed per 1,000 population), basically there is an acute shortage of beds in tier II, tier III and other rural areas, not in the metros. Considering the long gestation peri

This article was originally published on April 19, 2010.