ByteDance, the Chinese group founded by Zhang Yiming in 2012 that controls TikTok, has taken over one of China’s largest private hospital chains for about $ 1.5 billion. This is one of the largest operations by a tech group since in 2020 the government of President Xi Jinping initiated the tight regulations that affected, in addition to the real estate sector, also the technological one.
ByeDance paid 10 billion yuan to acquire Amcare Healthcarethat runs children’s and women’s hospitals in megacities such as Beijing and Shenzhen, writes Caixin. According to which now two subsidiaries of the holding company own a combined 100% stake in Amcare which emerges from the Qichacha business register.
It is about Xiaohe Health (based in Hong Kong) for 69.5% and Xiaohe Health Technology (based in Beijing) for the remaining 30.47%. ByteDance’s health app, Xiaohe competes with Alibaba Health Information Technology e Ping An Healthcare and Technology (Ping An is one of the largest Chinese insurance groups) for online medical consultations, hospital appointments and wellness services.
Why ByteDance took over the Amcare Healthcare chain
And a sector that is worth 89 billion dollars in ChinaBloomberg recalls, boosted by nationwide measures to stem the Covid-19 pandemic. ByteDance, criticized for its addictive TikTok app to minors, joins other tech giants as per Apple e Amazon who are exploring different avenues for digitize the health sector.
The takeover is one of the most important in terms of value since the authorities began to curb “the disorderly expansion of capital” in
2020, discouraging large deals that had boosted groups like Alibaba and Tencent in previous years. Founded in 2006 in Beijing, Amcare operates seven pediatric and women’s hospitals, two clinics and five postpartum centers in China, according to the group’s website.
In 2020 he obtained a government license for in vitro fertilization operations acquiring a Beijing hospital. Prior to the acquisition of ByteDance, he had among the shareholders Hillhouse Capital, China Renaissance e Warburg Pincus. This means that the health group is now completely back in Chinese hands.
Tech, the ratings begin to deflate
ByteDance began to enter the healthcare world last year. In September 2021 it had begun to acquire 17.57% of Amcare through its subsidiary Xiaohe Health Technology (Beijing) and by the beginning of 2022 Xiaohe Health (Hong Kong) had acquired 41.49%.
Over the years ByteDance has grown beyond its core business of online entertainment. Although it is still considered the best-rated startup in the world today, ByteDance has been trading in recent weeks at valuations below $ 300 billion, a 25% drop from last year, demonstrating the tension in which tech groups in China live. Also because, Bloomberg writes, no investors are looking to better sell the shares since the group postponed the listing. (All rights reserved)