A half-billion-dollar entry . . .
The Ontario Teachers’ Pension Plan Board and the New Zealand Superannuation Fund, New Zealand’s sovereign wealth fund, have acquired the Asia Pacific Healthcare Group (APHG). The pathology services provider is heavily involved in providing testing as part of New Zealand’s response to COVID-19. For C$500 million, the two funds will each have a 50 per cent stake in APHG, which provides pathology services to 75 per cent of New Zealand’s population. Healthscope, Australia’s second-largest private hospital operator, entered the binding agreement to sell APHG as part of its shift to focusing on Australian hospital operations.
Canada active in Australia, New Zealand health care . . .
Canadian acquisitions of health-care providers in the Asia Pacific are not new, as evidenced in APF Canada Investment Monitor data. Canadian landlord NorthWest Healthcare Properties invested C$402 million into Healthscope in 2018, and acquired a number of its hospital properties in 2019 for an additional C$300 million. Toronto-based Brookfield acquired Healthscope’s Australia and New Zealand operations for C$1.5 billion later that year, with the Caisse de dépôt et placement du Québec putting forward another C$270 million to acquire a stake in Healthscope last August. These moves in advance of the COVID-19 pandemic gave Canadian investors unique corporate control of Healthscope and APHG, which are now both playing central roles in domestic responses to the pandemic.
A test for future investment ties . . .
A number of countries have specifically highlighted investments in health care as they alter existing or introduce new foreign direct investment rules to address concerns about national interests and health-care supplies. Canada, Australia, and New Zealand have all adjusted their rules, making the APHG acquisition in particular a bellwether of how these rules will be applied between countries with historically warm ties. Australia and New Zealand have also been notably open to foreign activity in health care, and will provide examples as global health-care systems under financial strain face questions of opening up to investment, or consolidating resources at home.
- The Australian Financial Review: Healthscope, NZ Super agree $NZ570m pathology deal
- Deal Street Asia: NZ Super, Ontario Teachers’ to buy Healthscope’s NZ pathology business
- Lexology: Increased regulatory scrutiny of foreign direct investments in the healthcare sector