Remgro to take full control of Mediclinic Southern Africa in a restructuring with MSC

Remgro, the JSE-listed investment group chaired by renowned South African businessman Johann Rupert, and global shipping company MSC Mediterranean Shipping Company Holding, have proposed a restructuring of their interests in international healthcare group Mediclinic Holdings.

The deal, for an undisclosed sum, will see JSE-listed Remgro acquiring full ownership of Mediclinic Southern Africa and MSC's subsidiary Investment Holding Limited S.à r.l (IHL) acquiring full ownership of Hirslanden, Mediclinic's Swiss operations.

Remgro and IHL will then continue to hold their respective joint interests in the Middle East and Spire Healthcare Group plc businesses.

Mediclinic became 50% held by MSC, and 50% owned by Remgro in terms of an acquisition deal concluded in May 2023, and Mediclinic was delisted from the JSE, Namibian and London stock exchanges, on May 31, 2023.

"Remgro and IHL believe that assuming ownership in their respective home markets will enhance strategic focus and operational alignment and drive agility in response to market dynamics," a statement from Remgro said Monday.

On the JSE, Remgro's share price gained 0.84% to R175.32, a year ago it traded at R154.69.

The proposed transaction will align Remgro and IHL's ownership and leadership more closely with their respective home markets, enabling both Remgro and IHL to tailor their clinical and operational strategies to local market dynamics and patient needs, the companies said.

"This also better positions both businesses to unlock value through their strengthened local partnerships and brand presence, deepening trust with patients, clinicians, and regulators to drive sustainable growth through greater operational focus," the statement said.

Remgro and IHL remained strongly aligned in their "common desire to invest for the long-term in the private healthcare sector broadly" and to realise the potential of Mediclinic Holdings' network of hospitals, clinics and other facilities.

As such, Remgro and IHL would maintain their joint interests in the Middle East, a region that continued to represent a compelling opportunity for joint growth and collaboration. "This will solidify the partnership between Remgro and IHL, presenting the business with a shareholding foundation to continue its growth trajectory in the UAE."

The transaction would be structured to ensure stability for Mediclinic's employees and patients. Aligned with Mediclinic Holdings and its shareholders' values, which have patients and employees at its core, every effort would be made to accommodate all employees within the future structures and to explore reasonable alternatives, the statement said.

The agreement envisages a 1:1 equity value exchange ratio of Mediclinic Southern Africa and Hirslanden, based on Remgro's intrinsic net asset value as of June 30, 2023, and pending the finalisation of the transaction costs, with bank borrowings ringfenced in South Africa and Switzerland.

In the six months ended September 30, 2023, Mediclinic reported an adjusted increase in its adjusted earnings to $159 million from $83m euros. Revenue increased by 10% to $2.56m.

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