The UAE’s NMC Health is expanding in Saudi Arabia with a deal that will make it the second-largest non-state healthcare provider in the kingdom,
even as it eyes growth opportunities in Egypt.
The London-listed company signed a non-binding agreement with a unit of Saudi Arabia’s biggest pension fund to form a joint venture that will provide healthcare facilities in Riyadh and secondary cities, NMC Health said in a statement on Monday. NMC will own a majority stake in the new healthcare company.
“This is a milestone joint venture for NMC,” Prasanth Manghat, chief executive of NMC Health, said in a phone interview. “NMC grew from 600 beds to the second-largest healthcare provider in Saudi without paying cash.”
NMC Health has focused on the GCC, particularly the UAE, Saudi and Oman, for its expansion. Rising demand for healthcare services in Saudi Arabia and government initiatives to boost public-private partnerships are set to create significant investment opportunities in the country, Knight Frank said in a report last month. The kingdom’s 2020 National Transformation Plan has set out targets for the healthcare sector, including increasing private healthcare spend from 25 per cent to 35 per cent of the total healthcare expenditure.
The joint venture between NMC and Hassana Investment Company, a unit of the General Organisation for Social Insurance (GOSI), will see NMC hold a minimum stake of 51 per cent and operational management control of the assets, Mr Manghat said. The exact size of the stake will be determined when the final terms are set.