IDH pulls the plug on acquisition of a major stake in IDC: Integrated Diagnostics Holdings (IDH) has walked away from its bid to acquire a major stake in one of Pakistan’s largest diagnostics providers due to regulatory issues and challenging economic conditions, the multinational consumer healthcare outfit said in disclosures to the London Stock Exchange and EGX (pdf) yesterday. IDH said in December 2021 it would acquire 50% of the owner of Islamabad Diagnostic Center (IDC) for USD 72.35 mn, a move that would have given it a presence in South Asia for the first time.

Why the pullback? IDH said it was backing out of the acquisition because of “extensive delays in the regulatory review process, the challenging global economic environment and the condition precedent related to repatriating funds.”

This had been in the cards: IDH said last September that it was looking to renegotiate terms of the acquisition after the two sides failed to finalize terms by the deadline set out in the sale and purchase agreement. IDH signed the initial agreement with UAE-based Evercare, which owns 100% of IDC via a special purpose vehicle, in late 2021. IDC is a major diagnostics firm in Pakistan and has more than 80 branches across the country.

Pakistan’s economy is in crisis: Mass floods last year and political turmoil have exacerbated economic woes in the heavily indebted country, where foreign reserves are running dangerously low, leading some to warn a Sri-Lanka style default is in the cards. The local currency has lost some 14% since last Thursday to reach a record low against the USD, as authorities move to liberalize the exchange rate in hopes of restarting a stalled USD 7 bn assistance package from the IMF.

IDH’s share price held up here, but dipped in London on the news: IDH’s EGX-listed shares remained unchanged at EGP 25.20. LSE-listed shares, on the other hand, dropped 6.6% to close at USD 0.54.