Ramsay in $500m Asian venture

Ramsay Health Care plans to expand its presence in south-east Asia through a $500 million joint venture with Malaysian hospital group Sime Darby.

The deal, subject to Malaysian regulatory approval, will pool Ramsay's three Indonesian hospitals with Sime Darby's three hospitals and health sciences college.

Ramsay, Australia's biggest private hospital operators, will have a 50 per cent stake in the new Malaysian-based entity at a cost of $120 million over three years.

Chief executive Chris Rex said the deal would allow Ramsay to expand its footprint in surrounding countries.

"They're a big Asian company with a small health care business, and we're a big health care business with a small presence in Asia," he said. "It's an opportunity to put those attributes together and use it as a platform to grow the business."

He said there were already a number of opportunities the parties were hoping to progress. "We've both got a desire to move as quickly as we can," he said.

Sime Darby is one of the biggest companies listed on the Bursa Malaysia stock exchange, with a market capitalisation of around $17 billion. It operates plantations, property, auto, industrial, energy and healthcare businesses in more than 20 countries.

Wilson HTM analyst Shane Storey said further expansion into Asia would help Ramsay offset more stagnant growth in Europe. "We see this as a positive for the stock - opening a very different corporate avenue for the group to that in Europe, which had grown stale," he said.

Ramsay's Indonesian hospitals brought in $6.07 million in profit before interest and tax in the last financial year.