Hospital chain Fortis Healthcare said on Thursday it will buy an 86 % stake in diagnostic services firm Super Religare Laboratories Ltd (SRL) for an undisclosed sum in a bid to expand its business verticals.
Both Fortis and Religare are controlled by billionaire brothers Malvinder and Shivinder Singh, but are different companies in the healthcare business.
The Singh brothers own 86 % of SRL equity, a draft initial public offer document filed by Religare with the capital markets regulator, the Securities and Exchange Board of India (SEBI), in February showed.
A Fortis spokeswoman said in an e-mailed statement that only independent directors decided on the buyout of SRL, eliminating any corporate governance issues that could have come from a transaction within the group firms.
"Further, the valuation shall be carried out by an independent, one of the top four firms in India and thus the transaction will be carried strictly at arm's length basis," the spokeswoman said.
The company also plans to raise 1.6 billion rupees via a pre-IPO private placement of 8 million shares, the document filed with SEBI showed.
Fortis executives could not be reached for further comments on the transaction, which essentially means a group firm is taking over another.
India's stock, commodity, currency, bond and interbank cash markets are closed on Thursday for a public holiday.
SRL, which is looking to issue 28 million equity shares at a face value of 10 rupees each, is awaiting comments from
SEBI on its planned IPO, Fortis said in a statement.
SRL, which acquired diagnostics business of Piramal Healthcare for 6 billion rupees last year, was founded in 1996 and has a global presence with operations in United Arab Emirates, Oman, Qatar, Kuwait, Bahrain, Sri Lanka, Bangladesh, Nepal, the Maldives, Tanzania and Zambia, its website showed.