Fortis Healthcare fortunes to get Malaysia's IHH boost with acquisition

Since gains may take a while to accrue, experts believe short-term investors should tender shares in the open offer

Malaysian group IHH Healthcare Berhad’s Rs 40 billion acquisition of Fortis Healthcare is expected to result in improved cash flow, better operating profit margins and new business opportunity for the Indian hospital chain.

Fortis, which has been under the regulatory scanner on charges of fund diversion, has seen its losses widen due to provisioning and its operating profit margins have trailed those of its peers in hospital and diagnostic business.

While the acquisition is expected to lead to synergies and savings in finance cost, procurements and maintenance, the tie-up will bring new therapies to Fortis, provide collaboration opportunities for its