Aster DM Healthcare, Quality Care partner to create hospital chain

India's Aster DM Healthcare will merge with Blackstone-backed hospitals operator Quality Care India, the companies said on Friday, bringing Aster closer to its larger rivals Apollo Hospitals and Manipal Hospitals.

This is Aster's first major deal since selling its Gulf business. The company will get access to Quality's 5,500 beds, taking the merged entity's total bed count to more than 10,000.

The acquisition will bring Aster's domestic capacity close to that of market leader Apollo Hospitals and the privately-held Manipal Hospitals, making it one of the top three hospital chains in the country.

The merged entity, which will be called Aster DM Quality Care, plans to add another 3,500 beds by fiscal year 2027, funded through internal accruals. Earlier this year, Aster laid out plans to spend up to $108 million to boost its domestic capacity across the 19 hospitals it runs in India.

The combined entity will be jointly controlled by Aster's top shareholders and Blackstone, with respective holdings of 24% and 30.7%. The company did not specify the size of the deal.

Post the merger, Aster's shareholders will hold a 57.3% stake in the combined firm, with Quality Care - which operates CARE Hospitals, KIMS Health and Evercare hospital chains in India - owning the rest.

Azad Moopen, Aster's founder and managing director, will continue in his role and oversee the merged entity, while Varun Khanna, MD of Quality Care, will helm the merged entity as the CEO, the two companies said.