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Business deals

Malaysia's IHH hits roadblock in buying Indian hospital group Fortis

Japanese drugmaker Daiichi Sankyo's court filing could delay deal

Shivinder Singh, left, and Malivnder Singh are under court order to pay Daiichi Sankyo more than $500 million in damages over the Ranbaxy Laboratories sale.   © Reuters

MUMBAI -- IHH Healthcare's planned purchase of Indian hospital group Fortis Healthcare could be derailed depending on how a local court rules in response to Japanese drugmaker Daiichi Sankyo's protest.

Malaysia-based IHH said last month it will acquire Fortis for up to $1.1 billion. The plan is to acquire a majority stake through a combination of private placement and tender offer by the end of 2018.

Shortly after the announcement, Daiichi Sankyo filed with the Delhi High Court to block the deal. Malvinder and Shivinder Singh, who founded Fortis, were ordered in January to pay 35 billion rupees ($510 million) in damages to Daiichi Sankyo over the sale of Ranbaxy Laboratories, a generic drugmaker. The brothers were found to have withheld critical information from Daiichi Sankyo when they sold their stakes in Ranbaxy in 2008.

With the payment yet to be made, the Japanese company is protesting the Fortis sale. A ruling by the High Court could delay the timeline of the acquisition.

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