Sonic Healthcare takeover links transtasman labs

By Libby Middlebrook

Australia's Sonic Healthcare has bought most of New Zealand's laboratory and pathology services in one clean sweep - bringing together the largest group of laboratories in Australasia.

Sonic announced the deal this week as part of a $514 million takeover of Swiss-based SGS's medical group. It comes just two months after SGS merged two of the businesses - Auckland-based Medlab and Diagnostic.

While that merger involved job losses, Sonic Healthcare managing director Dr Colin Goldschmidt said yesterday that he did not anticipate any job-shedding as part of the takeover.

"The best thing about this transaction is there is no geographical overlap. Sonic is a publicly-listed company and we certainly have access to the capital to provide first-class infrastructure."

The deal will see SGS divest its Australasian healthcare services, including NZ-based Diagnostic Medical Laboratories, Medlab Central, Medlab South, Valley Diagnostic and NZ Radiology Group.

Diagnostic Medical Laboratories chief executive Frank Tuck said the sale was a positive step for the Auckland-based firm.

"Sonic is a healthcare business run by pathologists ... they have the same medical backgrounds that we do."

A total of eight pathology businesses and one radiology service will be sold to Sonic, which has been listed on the Australian Stock Exchange since 1987.

Dr Goldschmidt said the deal, which is subject to Sonic shareholder approval, will comprise $383 million in cash and 32 million Sonic shares.

The takeover would unite the largest group of laboratories in Australasia, employing more than 6000 people.

"There won't be any change to the day-to-day running of the New Zealand operation, but they will become part of a larger group rather than operating autonomously."

Pathology services merge into Australasian health giant.