NMC Health offer to acquire Al Noor Hospitals to benefit UAE healthcare sector

The emergence of a counter-offer to acquire Al Noor Hospitals Group highlights the appetite for UAE healthcare acquisitions as the sector gears up for a wave of consolidation.

On Friday, Abu Dhabi-based NMC Health made an offer to acquire Al Noor Hospitals following an offer by Mediclinic Southern Africa.

NMC Health made a cash and share offer for the buyout of Al Noor Hospitals.

This latest deal could be good news for patients in a sector that has been beset by skill shortages, according to Ahmed Faiyaz, a healthcare analyst with Ernst and Young.

“It is beneficial for patients, as the consolidated entity would potentially be stronger, and therefore could enhance quality of care and patient services, and have the ability to retain and share a pool of highly qualified doctors and nurses,” he said. “A provider with a larger network of clinics and hospitals does create a stronger position with the health insurers.”

The estimated healthcare expenditure in the UAE is expected to rise to US$19.6 billion in 2018 from $14bn in 2013, according to an Alpen Capital report last year.

The size of the market would allow for at least five or six health provider groups to create a strong position for themselves, said Mr Faiyaz.

“If every hospital group aims to grow through greenfield expansion, it takes a longer time to address the market opportunity between two to three years, and it creates avoidable competition for limited clinical talent with relevant market experience,” he said. “The presence of a few larger providers with a network of clinics and hospitals creates stability in the health system, given that through scale, they see higher patient volumes and create more job opportunities in the health sector.”

The consolidation in the healthcare market could also prove to be attractive to international healthcare providers.

Johannesburg-listed Mediclinic entered the UAE in 2006, while Singapore’s ParkwayHealth, which manages Danat Al Emarat Hospital in Abu Dhabi, entered this year.

Mr Faiyaz said there was “definitely room for growth for the other regional and international providers”, citing the growth potential of the healthcare sector, the need for specialised high-quality care, inbound and outbound medical tourism in the region and the relative insurance stability.


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