Despite trade tensions between the United States and China, Fresenius Medical Care AG & Co. KGaA (NYSE: FMS) announced three major deals to expand there. The global dialysis company acquired majority shares in several dialysis centers and renal hospitals and has plans to build even more.
Because of its enormous population of more than 1.4 billion people, China is a long-standing target market for American marketers. As Fresenius’ press release announcing these deals on December 5 noted, approximately 10.8% adults in China have chronic kidney disease, or 120 million people.
The company paid an undisclosed amount for a 70% stake in Guangzhou KangNiDaiSi Medical Investment Co., Ltd. The target has three independent hemodialysis centers under construction in the cities of Guanzhou and Zhaoqing in Guangdong province, which borders Hong Kong. A proposed fourth center is waiting for government approval.
Its second deal gained a 55% stake in Henan Aishen Hospital Management Co. Ltd., which sells dialysis products and manages dialysis centers, and Aishen Beijing Hospital Management Co. Ltd., which provides dialysis treatment services across China.
Henan Aishen and Aishen Beijing are building 13 dialysis centers and a grade 1 renal hospital to complement the dialysis care network that will cover Henan, Shandong, Guangdong and Hainan provinces. There are plans to expand into new locations.
In addition, Fresenius took a 60% stake in Daqing Kangda Dialysis Center, an independent treatment center in Heilongjiang Province. It has 1,200 square meters and 20 dialysis machines, and was renovated in April 2018.
These acquisition follow the purchase of Yannan Kunming Wuhua Healthcare Hospital in April 2017, and the acquisition of a 70% stake in Sichuan Hejiang Kangcheng Renal Hospital in June 2018, as well as the acquisition of 70% in Sichuan Ziyang Zhongxin Hospital, both located in Sichuan province. That’s a strong head start for Fresenius.
In the United States, Fresenius now operates more than 2,400 dialysis centers, still its largest market. Rival DaVita Kidney Care (NYSE: DVA) operated or provided administrative services at 2,580 outpatient dialysis centers located in the United States serving approximately 201,000 patients.