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Aster DM Healthcare to split between Dubai and India: Dubai-based Indian healthcare conglomerate Aster DM Healthcare will sell a 100% stake in its GCC business to holding company Alpha GCC, dubbed Aster GCC, for USD 1 bn, according to a company disclosure to the Indian stock exchange NSE.

More on the transaction: USD 903 mn is earmarked for the agreement’s closure, and there’s potential for an additional USD 98.8 mn contingent upon the GCC business’ financial performance by early 2024.

Who gets what from Aster GCC? A consortium of investors led by sovereign-owned private equity firm Fajr Capital will get a 65% stake in Aster. The founders of Aster, the Moopen family, will retain a 35% stake in the company, ensuring their ongoing management and operation of the GCC business.

The makeup of the consortium: The 65% stake will go to the Emirates Investment Authority, Kuwait-based investment company Al Dhow Holding Company, Saudi’s Hana Investment Company, and Kuwait’s Wafra International Investment Company, according to a recent press release.

Why does Aster want to break up? Aster wants to focus more on the Indian market having its independent growth trajectory with its own governance structure and capital allocation strategy; Indian investors will now be able to invest in an Indian-majority business, the press release reads. Aster was previously not able to seize on inorganic growth opportunities in India because of opposing capital investment requirements between the GCC and India, Reuters reports citing Aster’s Group CEO Alisha Moopen.

What they said: “70% of our business is from the GCC, and the 30% from India, it didn’t make a lot of sense for Indian investors because they have very limited understanding of the GCC business,” Alisha Moopen told Bloomberg in an interview (watch, runtime: 4:40). “The world is moving from globalization to hyper-localization,” Moopen said.

What happens after the separation? There will be separate management teams to steer operations in both GCC and Indian entities, each backed by dedicated investor support pushing for growth in their respective markets, the press release reads.

Aster’s expansion plans: Aster wants to expand more in the Saudi market + increase bed capacity in India, aiming to add over 1500 beds by FY27.

Advisors: Moelis & Company and Credit Suisse served as the selling agents. HSBC Bank Middle East Ltd., Allen & Overy LLP and PwC supported the Fajr consortium, while Cyril Amarchand Mangaldas represented Aster.

More on Aster DM Healthcare: Aster is a healthcare giant with over 15 hospitals, 118 clinics and 276 pharmacies in the UAE, Saudi Arabia, Oman, Bahrain, and Jordan. The company also has 19 hospitals, 13 clinics, 226 pharmacies and 251 patient experience centers across India.

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