Bangkok Dusit Medical Services Public Company Limited (BDMS) has made an unsolicited offer to buy Bumrungrad Hospital.
Bangkok Dusit Medical Services Public Company Limited (BDMS) has made an unsolicited offer to buy Bumrungrad Hospital Public Company Limited .
BDMS already has a 25% share in Bumrungrad Hospital Public Company Limited (BH).
Bangkok Dusit Medical Services (BDMS) financial results for 2019 shows that revenue from international patients grew by 4% over 2017, with a 31% increase in patients from Oman, a 15% increase in Cambodian patients and a 14% increase in UAE patients. By revenue, the increases are 56% UAE, 56% Oman, and 16% Cambodia. 30% of hospital revenue came from international patients.
International patients are not all medical tourists, as BDMS has two hospitals in Cambodia so it is not known how many patients are Cambodians treated in Cambodia and how many are Cambodians treated in Thailand.
BDMS has 46 hospitals in Thailand and two in Cambodia and one being built in Thailand. 2019 revenue by patient nationality was:
|NATIONALITY||% of 2019 global revenue|
Source: BDMS 2020
Bumrungrad International Hospital in Bangkok is a leading medical tourism destination that treats 1.1 million patients a year including 520 international patients. These are not all medical tourists, as there is multi-counting of patients by counting each of their visits, and figures include those just buying prescription drugs. 66% of revenue was from international patients in 2019.
While BDMS revenue and growth in 2019 was very good, Bumrungrad revenue plateaued.
The BDMS logic for the bid is that it is in line with the investment policy of the company, which focuses on investment in healthcare, due to Thailand having a competitive advantage in providing healthcare services at a globally accepted standard and competitive pricing in comparison with the quality of services, helping to attract clients from all over the world.
The increase in demand for healthcare services in the region is due to Thailand and neighbouring countries’ aging society, rising income, focusing on healthcare services in ensuring longevity and growing private health insurance. Bumrungrad’s business demonstrates strong growth potential and has the ability to generate favourable long-term returns, as it is a reputable hospital for treating highly complex diseases and is well known to both Thais and foreigners, especially to Middle East and Asia-Pacific countries.
Market condition presents an attractive opportunity to make additional investment in a top-tier hospital at reasonable price.
The offer took Bumrungrad by surprise as the two hospital groups have in the past been operating separately without any business collaborations or synergies. Both have leading market positions, particularly in medical tourism and in private tertiary healthcare catering for middle to high-end customers.
Bumrungrad believes it is in the best interest of consumers to preserve healthy competition in private tertiary healthcare and has referred the bid to the Office of Trade Competition Commission to seek their clarification on the competition policy with respect to the intention announced by BDMS
In an analysis of the proposed offer, Healthcare Markets international, states:
“Any deal is subject to both shareholder approval and will be looked at by the Trade Competition Commission. This will not be easy. BDMS is already the biggest player in the market with 7,732 beds to Bumrungrad’s 580 beds, but analysts reckon that it could give BDMS a monopolistic position. Should a deal emerge, it would be paid for from working capital and loans. BDMS said that it intended to maintain Bumrungrad’s listed status.”