Merger to grow China's private health care

Shanghai Fosun Pharmaceutical Co announced on Tuesday that it will raise its share in US-headquartered health care provider Chindex International, and propose to delist Chindex from the Nasdaq.

Chindex's investors include Fosun Industrial, a subsidiary of Shanghai Fosun.

Chindex has agreed to a merger with a buyer consortium - Shanghai Fosun, US private equity firm TPG and the CEO of Chindex. The transaction has an implied equity value of about $369 million.

Shanghai Fosun will become the biggest shareholder in Chindex.

Since the high-end health care sector in China is immature, the central government is encouraging investment in the private health care market. The merger is set to push the expansion of Chindex across China.

Roberta Lipson, a founder and the current CEO of Chindex, will keep a 3.21 percent stake and stay on as CEO, substantially rolling over all of her equity in the transaction.

"We believe that new partners and committed financing are needed to achieve the next phases of these plans, including new facilities in our current service locations as well as significant geographic expansion," Lipson said.