Rhoen-Klinikum to sell hospitals to Fresenius for $4 billion

Fri Sep 13, 2013 7:07am EDT
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By Ludwig Burger and Jonathan Gould

FRANKFURT (Reuters) - Germany's Rhoen-Klinikum is to sell most of its hospitals to rival Fresenius SE for 3.07 billion euros ($4.1 billion), in an attempt by Rhoen's founder, Eugen Muench, to outflank opponents to an outright sale of the company.

The sale comes exactly 12 months after Fresenius dropped plans to buy all of Rhoen for 3.1 billion euros after an industry rival and service supplier bought blocking stakes in Rhoen.

The 43 hospitals and 15 outpatient facilities now being sold account for about two thirds of Rhoen's revenues, with mainly specialized clinics and university teaching hospitals remaining with Rhoen.

Rhoen and Fresenius have long wanted to merge to create a countrywide network of private hospitals, extensive enough to enable Fresenius to start offering its own medical insurance.

The transaction, which according to Rhoen does not require a shareholder vote, would make Fresenius's German hospitals unit Helios Europe's largest private hospital operator, Fresenius said in a statement.

Shares in Rhoen were up 11 percent at 19.4 euros by 0950 GMT, while those of Fresenius were up 4.4 percent at 91.0 euros.

Konrad Lieder, an analyst with Equinet Bank, said the add-on insurance offering should improve Fresenius's pricing power in the mid-term but warned of legal uncertainties.

"We see two major sources of risk: anti-trust and a legal appeal against the transaction by minority shareholders."   Continued...

The headquarters of German healthcare company Rhoen-Klinikum AG are pictured in Bad Neustadt near Fulda September 3, 2012. REUTERS/Alex Domanski