Tenet Healthcare Corp. will divest nearly all its international hospitals for $337 million, giving it a capital infusion to finance acquisitions in the United States.
The deal will end Tenet's position as the largest U.S. operator of foreign acute-care hospitals. For the fiscal year ended May 31, 1994, Tenet's international operations posted $175 million in revenues and operating profits of $24 million.
Singapore-based Parkway Holdings will pay $274 million for two hospitals in Singapore; a 30% interest in 375-bed Subang Jaya Medical Center, Kuala Lumpur, Malaysia; and a 40% interest in Bumrungrad Medical Center, a 554-bed hospital set to open in 1997 in Bangkok, Thailand.
In addition, Parkway will pay $63 million for Tenet's 53% interest in Austral-ian Medical Enterprises, a nine-hospital system that plans to open a $70 million, 202-bed hospital in Sydney this fall.
Ironically, at the same time Tenet is selling foreign hospitals, Columbia/HCA Healthcare Corp. is expanding its overseas holdings.
Columbia will form a joint venture in London with General Healthcare Group, Britain's largest independent healthcare provider. Columbia will combine its Wellington Hospital and Wellington Day Surgery Center with three hospitals owned by General to form a 600-bed system with $130 million in annual revenues.
All three of the General hospitals were bought from American Medical International in 1990. AMI is now part of Tenet.
Niels Vernegaard, president of Columbia's London region, said Columbia also was looking in Europe for additional acquisitions.
Tenet's predecessor company, National Medical Enterprises, got into the international hospital business in the mid-1980s. However, Tenet's international operations had been stymied in some regions.
In Australia, its growth was blocked by the Australian government, which cited its affiliation with the scandals plaguing NME in the United States. NME pleaded guilty last year to federal charges of patient fraud and paying kickbacks (July 4, 1994, p. 2). Last year, the government blocked Australian Medical Enterprises' attempt to buy a pathology business, and AME pulled out of the bidding to operate a government veterans' hospital.
The Tenet deal's crown jewel is 505-bed Mount Elizabeth Hospital in Singapore. The company also is selling its other Singapore facility, 145-bed East Shore Hospital.
Tenet will continue to own 184-bed Centro Medico Teknon, a money-losing hospital in Barcelona, Spain. NME opened the hospital in 1994 as a joint venture with a local partner who was later jailed for fraud. Last June NME bought out the partner's 50% interest.