NMC Health Plc agreed to form a joint venture healthcare company in Saudi Arabia with the General Organization for Social Insurance, or Gosi, the largest pension fund in the kingdom.
Under the deal, London-listed NMC and Gosi's investment arm Hassana Investment Co. will form the joint venture by transferring their investments in Saudi assets.
NMC, which is the leading private healthcare operator in the United Arab Emirates, will contribute all of its existing Saudi assets, which will be revalued, to the joint venture company. The revaluation of these assets is expected to lead to "considerable value accretion at the joint-venture," an NMC release said.
Meanwhile, Gosi will transfer its 38.9% stake in Tadawul-listed National Medical Care Company, or CARE, at 70 Saudi riyal per share, to help set up the joint venture healthcare company.
The proposed joint venture expects to create one of the biggest private healthcare platforms operating in the Saudi Arabia, with a combined bed capacity of 1,489 — 664 beds contributed by NMC and 825 by CARE — the release said.
Further, the proposed joint venture will also help NMC expand its presence in Saudi Arabia. "We identified KSA [Kingdom of Saudi Arabia] as a key strategic priority for NMC and the proposed partnership between NMC and Gosi/Hassana would offer a tremendous opportunity for both the companies to better serve the KSA healthcare market," NMC CEO Prasanth Manghat said.
As of June 8, US$1 was equivalent to 3.75 Saudi riyal.
