Japanese general trading firm Itochu Corporation has become a strategic investor in OUE Lippo Healthcare (OUELH), the healthcare subsidiary of the SGX-listed property developer and owner OUE Limited, through a private placement of S$78.8 million ($59.1 million) worth of shares.
Tokyo-listed Itochu intends to diversify into Asia’s growing healthcare market by taking a strategic stake in OUELH, which operates nursing care facilities.
The deal was conducted through its indirect wholly-owned subsidiary Browny Healthcare, which will acquire 562.5 million new shares at 14 cents, 2 cents higher than OUELH’s closing price on Wednesday. The transaction will be completed before 10 February and will grant Itochu a 25.3 per cent stake in OUELH.
Masahiro Okafuji, President and CEO of Itochu, says, “Taking a stake in OUE Lippo Healthcare allows Itochu to partner with the Lippo Group to gain a strategic foothold in this growing sector.”
With Itochu holding a stake, OUELH be able to harness business synergies in Japan and other parts of Asia through leveraging on Itochu’s brand name, vast business network and strategic partnerships with other Asian conglomerates, as well as its healthcare assets.
Stephen Riady, Executive Chairman of OUE and board director of OUELH, says, “With its extensive network in Asia, ITOCHU will be a key partner for OUE Lippo Healthcare as it embarks on its growth path to become a leading healthcare company in Asia.”