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John R. Fischer, Senior Reporter | February 02, 2024
Sheikh Shakhbout Medical City (Photo courtesy of SSMC)
Mayo Clinic is selling off its shares in the first hospital it established outside of the U.S. to a subsidiary of Pure Health Holding, the largest integrated health network in the United Arab Emirates, for a reported $150 million.
State-owned Abu Dhabi Health Services Company (SEHA) has signed a definitive agreement to acquire Mayo’s stake in the 741-licensed-bed hospital, Sheikh Shakhbout Medical City (SSMC), which Mayo opened with SEHA in 2019 to provide specialty care to patients with serious and complex conditions and has become one of the largest providers in the Middle East,
reported the Star Tribune.
Reuters
broke the news in late January.
"Following the completion of the transaction, SSMC will be wholly owned and operated by SEHA,” said Sharon Theimer, Mayo Clinic’s communications manager for international media relations, in a statement.
Once completed, SEHA will acquire 25% of the total issued shares of Sheikh Shakhbout Medical City, it said in sales documents it filed on January 29.
Mayo did not disclose why it was pulling out of its investment in the hospital after only four years in what it once said was supposed to be a planned 20-year collaboration between SEHA and Mayo. The agreement carried an option to extend the partnership by ten years, and Mayo also paid $50 million in cash and other intangibles to fund a 25% equity position in the joint venture, according to its 2020 financial documents.
Additionally, the Minnesota-based healthcare system also had a hospital expertise agreement, a brand license agreement, and a research contribution agreement with the medical center.
According to Post Bulletin, financial documents revealed the carrying value of its investment in the hospital rose from $87 million in 2020 to $89 million in 2021 and then to $155 million in 2022.
In addition to its facility in Abu Dhabi, Mayo runs a hospital in London, which it started in 2020 as part of another joint venture with Oxford University before buying out the academic institution’s shares.
Established as part of the Abu Dhabi Economic Vision 2030 to elevate healthcare services in the UAE, SSMC is expected to treat 20,000 inpatients, 250,000 outpatients, and 70,000 emergency patients annually.
A completion date or time frame for the sale was not disclosed.
