IHH Healthcare Berhad has said delays in securing mandatory tender offer (MTO) approvals for its acquisition of Fortis Healthcare resulted in financial losses, as the company defended the 2018 transaction amid an ongoing legal dispute involving Japanese pharmaceutical major Daiichi Sankyo Co Ltd.
The Malaysian healthcare group said it was not a party to the underlying dispute between Daiichi Sankyo and the judgment debtors and maintained that its acquisition of Fortis was carried out through a transparent and regulated process.
IHH says Fortis deal followed regulatory process
According to IHH, the 2018 acquisition received the required corporate, shareholder and regulatory clearances, including approval from the Competition Commission of India (CCI) and compliance with Securities and Exchange Board of India (SEBI) takeover regulations.
The investment involved a ₹4,000 crore preferential allotment of newly issued Fortis shares, along with a mandatory tender offer to public shareholders.
IHH stressed that it did not acquire secondary shares from Fortis’ former promoters and made no payments to them as part of the transaction.
MTO approval delay at centre of dispute
IHH said the prolonged delay in obtaining approvals for the mandatory tender offer caused losses to its investment. The company said the MTO process eventually received the necessary approvals last year, allowing the long-pending process to move forward.
The group said its investment came at a time when Fortis required recapitalisation and strategic direction. Since then, it claimed Fortis has made progress in clinical standards, governance and operations.
Tokyo court rejects NTK’s compensation claim
The development follows a ruling by the Tokyo District Court, which dismissed claims filed by IHH’s indirect wholly owned subsidiary, Northern TK Venture Pte Ltd (NTK), against Daiichi Sankyo and ordered NTK to bear the litigation costs.
NTK had sought compensation of up to ₹10,930 crore (RM5.7 billion) from Daiichi Sankyo, alleging that the Japanese pharmaceutical company prevented it from proceeding with open offers for additional Fortis shares in 2018.
NTK filed the claim in October 2023, arguing that the alleged interference resulted in financial losses.
IHH reaffirms India investment plans
Despite the legal setback, IHH said India remains a strategic market for the group and that it remains committed to expanding its investment in the country.
The company also highlighted its contribution to Fortis since the acquisition, citing sustained investment, governance improvements and a focus on patient care.
The dispute stems from the complicated legal and regulatory circumstances surrounding Fortis’ ownership and acquisition process in 2018.
