Malaysian conglomerate Sime Darby said on Friday (Nov 10) it will sell its stake in Ramsay Sime Darby Health Care, its Asia-focused healthcare 50-50 joint venture with Australia’s Ramsay Health Care, for US$1.21 billion.

Sime Darby Holdings, a unit of Sime Darby, entered into the sale and purchase agreement with Malaysian hospital chain Columbia Asia Healthcare to mark its exit from the healthcare business.

“The offer from Columbia Asia was one we could not refuse,” said Sime Darby’s group chief executive officer Jeffri Salim Davidson in a statement.

“While the hospital business is a great asset, we have always maintained our focus on our core trading businesses of motors and industrial,” he added.

The announcement confirmed a report by Reuters on Tuesday saying that Columbia Asia, a South-east Asian healthcare firm backed by alternative asset firm TPG, was the frontrunner to buy Ramsay Sime Darby.

The sale will enable Sime Darby to unlock the value of its healthcare assets, which have previously been deemed non-core, with a RM 2 billion (S$577.8 million) gain on disposal of the stake, the company said in a statement.

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Ramsay, Australia’s largest private hospitals operator, holds the other 50 per cent stake in Ramsay Sime Darby. Ramsay did not immediately respond to Reuters’ request seeking comment outside of working hours.

The deal marks the largest South-east Asian healthcare acquisition since 2019 when Malaysian conglomerate Hong Leong Group and TPG bought Columbia Asia’s assets for about US$1.2 billion.

Besides Hong Leong and TPG, sovereign wealth fund Abu Dhabi Investment Authority and Malaysian state pension fund Employees Provident Fund will provide new capital to fund the transaction, Sime Darby said.

Post transaction, both co-investors will have a combined shareholding of around 25 per cent in One Health Holdings, the TPG-owned and controlled unit that owns Columbia Asia, the statement showed.

Started in 1996, Columbia Asia currently has 22 medical facilities in Malaysia, Vietnam and Indonesia and focuses on building mid-size hospitals in residential areas, according to its website.

Sime Darby expects the deal to be completed in the third quarter of fiscal 2024. REUTERS