M&A WATCH- Cleopatra Hospitals merger with Alameda Healthcare likely within a month? EGX-listed Cleopatra Hospitals Group is in the final stages of merger talks with Alameda Healthcare, setting the two up to consummate a marriage “within a month,” Al Mal reports, citing unnamed “informed” sources.

Transaction was stalled after covid-19 hit valuations on the EGX: The newspaper says sources told it the covid-19 outbreak delayed talks — and saw both sides take a second look at valuations. CHG had its share price fall 25% since early February, reaching EGP 4.32 at the end of last week compared to EGP 5.80 almost two months ago. The company’s share rallied yesterday on the merger talks, closing up 3.2% at EGP 4.43, but the plunge has cut Cleopatra’s valuation to around EGP 7 bn from over EGP 9 bn.

A new sense of urgency: The outbreak has brought a new impetus to finalize the agreement, the sources said, as larger healthcare entities are better equipped to cope with epidemics through the provision of more beds and the ability to mark off wards as quarantine centers.

The Egyptian Competition Authority (ECA) is reportedly looking to block the merger, saying it would stifle competition. The ECA can impose fines and post-merger conditions if it can prove that the agreement would breach the Antitrust Act. Cleopatra is Egypt’s largest private hospital group, but industry numbers suggest the merged entity would have just a 4.4% market share of private sector beds and a market share of about 1.1% of the total market.

Background: Cleopatra was formed in a rollup led by now-defunct private equity outfit Abraaj. The group owns six major hospitals in the Greater Cairo area including Cleopatra, Nile Badrawy, Al Shorouk, Cairo Specialised, and in November acquired El Katib Hospital in Dokki. Alameda is a partnership between chairman Dr. Fahad Khater and the Emirates’ KBBO Group. It owns high profile facilities including As-Salam International and Dar Al Fouad.

We sat down with Alameda CEO Neeraj Mishra earlier this month to talk about how the company is responding to the pandemic: Tap/click here for the full interview.