Aster DM Healthcare & Quality Care India Merge to Create Top Hospital Chain

New Delhi, Nov 29 (PTI) Aster DM Healthcare Ltd and Blackstone-backed Quality Care India Ltd on Friday announced a merger deal through a share swap deal creating one of India's top three hospital chains.

The two companies have signed definitive agreements to merge, subject to regulatory, corporate and shareholders' approvals, Aster DM Healthcare (Aster) and Quality Care India Ltd (QCIL) said in a joint statement.

The merger will create one of the top three hospital chains in India in terms of revenue and number of beds with 38 hospitals and over 10,150 beds with a strong presence across South and Central India in 27 cities, it added.

The merged listed entity will be named Aster DM Quality Care Ltd.

As part of the deal, Aster will purchase a 5 per cent stake in QCIL from Blackstone and TPG in consideration of primary share issuance by Aster for 3.6 per cent stake in it as an initial share acquisition.

Subsequently, QCIL will be merged into Aster by way of a scheme of amalgamation. Aster expects the merger transaction to close by the third quarter of FY2025-26. The ratio for the initial share acquisition is the same as proposed for the merger, the statement said.

The merged entity will be jointly controlled by Aster promoters and Blackstone, holding 24 per cent and 30.7 per cent ownership respectively, it added.

Based on the agreed swap ratio, Aster shareholders will hold 57.3 per cent and QCIL shareholders will hold 42.7 per cent in the merged entity.

Aster DM Healthcare Founder and Chairman Azad Moopen will continue in his role as the Executive Chairman and will oversee the merged entity -- Aster DM Quality Care. On the other hand, QCIL Group MD Varun Khanna will be the MD and Group CEO of the merged entity.

In a regulatory filing, Aster said subject to mutually agreed thresholds Moopen will continue as the executive chairman for a period of three years and six months after which, he will continue as non-executive Chairman.

Aster promoters will retain the right to appoint the non-executive Chairman, with BCP having the right to appoint the Vice-Chairman.

"The integration of Aster and Quality Care's extensive network and deep operational expertise with backing from Blackstone and TPG 'among the most respected private equity firms will enhance our ability to deliver world-class healthcare services, drive innovation, and improve patient outcomes," Moopen said.

Blackstone Private Equity Head of Asia, Amit Dixit said: "We are committed to creating one of India's leading platforms in the healthcare sector...we will help grow the platform, expand its footprint, and develop it into a world-class healthcare institution."

TPG Senior Advisor, Vishal Bali said healthcare has long been a thematic focus for TPG globally and in India, and Quality Care's partnership with Aster will create one of India's top three multi-speciality hospital chains.