FMC seeks growth outside main U.S. market
By Ludwig Burger and Andreas Kröner
FRANKFURT (Reuters) - Fresenius Medical Care (FMEG.DE: Quote), the world's largest dialysis provider, is looking for opportunities to grow in Europe and Asia as it feels the limits to growth in its largest market, the United States, its chief executive told Reuters in an interview.
FMC faces the twin challenge of antitrust limits to doing more U.S. deals coupled with a stricter Medicare reimbursement regime introduced in 2014 that forced it to slash costs.
"When you are as large as we are in our core business in the U.S., you can rarely buy anything and keep it all. Therefore, we are mainly looking for M&A outside of the U.S.," said Chief Executive Rice Powell.
FMC, which is indirectly controlled by a German charitable trust, operates more than one in three dialysis treatment centers in the United States.
Another response by FMC to the barriers to growth at its core U.S. dialysis business has been to branch out into related areas of care coordinating a range of treatments that dialysis patients typically need like cardiovascular and diabetes care.
The group last year laid out a plan to build a $5 billion care-coordination business by 2020 to offer a wider range of care for the chronically ill as part of an initiative to almost double group sales to $28 billion by then.
FMC, which derives about two-thirds of its sales from North America, in 2014 bought up a number of healthcare services companies, seeking to offer bundled treatments for kidney and cardiovascular disease.
To contain costs and ensure quality, regulators in the United States and elsewhere are keen for healthcare providers to organize the complex care of chronically ill patients for fixed-rate payments. Continued...