Malvinder Mohan Singh, chairman, Fortis Group, speaks to Joe C Mathew on the rationale behind the consolidation move. Edited excerpts:
While floating a separate entity to spearhead international acquisitions, you said you wanted to de-risk the listed entity, Fortis India from the financial burden that follows. Nine months and seven overseas acquisitions later, you are planning to merge the family-owned company with that of the listed entity. Why?
We had announced the setting up of Fortis Global at the time of the Parkway acquisition as the (promoter) family wanted to de-risk Indian investors. The family incubated Fortis’ international operations as it was an uncharted terrain for the company at that time.
Over the last several months, we have proved that overseas acquisitions can be successful. If we were primarily a hospital services provider as an Indian entity, today we are active across eight verticals, from hospitals to primary care to dental speciality. A consolidation at this stage will create an integrated healthcare delivery platform in the Asia-Pacific region.
Could you explain these synergies as acquired assets are catering to unrelated verticals?
The verticals may not be international at the moment, but they will cross-pollinate over a period of time. For instance, we can leverage the expertise of Australia’s largest dental care provider (Dental Corp) while thinking of a similar facility in a country such as India.
We intend to take each vertical across all markets we are present in. We will go deep in each country of operation and provide service across verticals. The development of new verticals will be easy in developed markets such as Australia or Hong Kong, while it could be slower in emerging markets such as Vietnam. There is tremendous growth opportunity in each of these markets.
Your investment in Sri Lanka has been in a hospital chain that had an operational contract with Apollo Hospitals. Is it only a financial investment or will Fortis take up the contract to run that hospital?
We have 30 per cent stake in Lanka Hospitals Corporation and have three board members in that company. We may not be managing the hospital, but we are committed to support them and develop the Sri Lankan market.
