Manipal Hospitals Acquires AMRI Hospitals to Offer Healthcare Facilities in Eastern India

The acquisition of AMRI Hospitals aligns with the geographic footprint of Manipal Hospitals. The AMRI Hospitals will undergo a rebranding process, which is expected to be completed in six months. 

Manipal Hospitals, headquartered in Bengaluru, has acquired an 84% stake in four hospitals owned by the Emami Group under the brand AMRI. This acquisition includes three hospitals in Kolkata and one in Bhubaneswar, estimated to be worth around INR 2,300 Cr.

Manipal Hospitals will assume operational control of the AMRI units in Dhakuria, Mukundapur, Salt Lake, and Bhubaneswar as part of this strategic deal. Further, the Emami Group will retain ownership of Kolkata's dental and diagnostic clinics.

Dilip Jose, managing director and CEO of Manipal Hospitals, said 'œWe would like to change the names to one brand, Manipal Hospitals. It will be easier for the patients. The change of brand name will take some time, maybe around six months,'

Manipal Hospitals currently ranks as the second-largest hospital chain in India, boasting 9,500 beds, more than 5,000 doctors, and approximately 20,000 employees. In contrast, the four AMRI hospitals have a combined capacity of 1,200 beds, employ around 800 doctors, and have about 4,500 staff members.

Jose noted that this acquisition marks Manipal Hospitals' entry into the eastern region of India and aligns with their expansion strategy. They are exploring opportunities to establish a presence in select towns and cities in West Bengal, such as Siliguri and Durgapur. Additionally, Manipal Hospitals now operates one hospital in Odisha and is actively considering further expansion in the region.

He further added, "We believe the eastern part of India is underserved in terms of healthcare. People have to travel long distances for treatment. Our flagship hospital in Bangalore gets a significant number of patients from Bengal."

The acquisition of the majority stake in Manipal Health Enterprises by Temasek, a Singapore-based investment firm, has played a pivotal role in facilitating this expansion. Presently, the Manipal Group, the original promoters of Manipal Health Enterprises, holds a 30% stake in the hospital chain, while Temasek owns 59%.

Aditya Agarwal, a director of the Emami Group, indicated that the Emami Group would maintain a 15% stake in AMRI Hospitals. The West Bengal government holds a roughly 1% stake in the hospital chain, a reduction from its earlier 26% stake following a tragic fire at the Dhakuria hospital in 2011 that claimed over 90 lives.

Both Aditya Agarwal and Manish Goenka, another director of the Emami Group, explained that they retained the 15% stake because of their close emotional connection to AMRI Hospitals.

The Emami Group, renowned for its diverse interests spanning FMCG, foods, biodiesel, real estate, retail, newsprint, paperboards, and art, decided to divest its majority stake in AMRI Hospitals to focus on its core businesses.

The negotiations for the takeover between Manipal Hospitals and the Emami Group spanned approximately three years, with the COVID-19 pandemic temporarily slowing down the process.

This acquisition is part of a larger trend in India's healthcare sector, characterised by a surge in mergers and acquisitions (M&A). In 2022, M&A activity in the healthcare sector in India reached $4 billion, with an additional $2.2 billion in the first five months of 2023, according to Reuters.

The private healthcare sector in India is experiencing robust growth, with PwC projecting an annual growth rate of 12-14% for India's private healthcare market, currently valued at approximately $48 billion. This growth is seen as a post-pandemic phenomenon, highlighting the country's increased importance of healthcare services and infrastructure.