VANCOUVER — B.C.’s Health Ministry has granted the licences needed for the province’s largest provider of seniors care to be acquired by China’s Anbang Insurance Group, in a deal believed to be worth more than $1 billion.
Ottawa approved the transaction for Anbang to buy Vancouver-based Retirement Concepts in late February.
Retirement Concepts runs 24 care homes in B.C., Alberta and Quebec, including seven on Vancouver Island.
Although Retirement Concepts won’t say how large the deal is, it was massive enough to trigger a review by the federal government’s Investment Review Division, which examines all foreign-ownership offers that exceed $600 million.
The purchase is the first major foray into the Canadian health-care service industry by a Chinese investment firm.
Since 2004, Anbang, which has a reported $300 billion US in assets, has raised eyebrows with a spree of offers for international property and insurance assets.
This is the second time the company’s investments have come under federal scrutiny. In April 2015, Ottawa approved its plan to buy a 66 per cent stake in the four Bentall towers in Vancouver for an estimated $660 million. A month later, it bought the rest of the property from the remaining shareholders.
Retirement Concepts says it “will retain a minority stake and will continue to manage the day-to-day operations” of all of its seniors communities, and that there will be no changes to care, policies, procedures or operating standards.
The chain was started by the Jamal family, who made their first retirement home investment about three decades ago. By last year, they had won annual Health Ministry contracts worth about $86 million.
The B.C. government said the sale of any care facility results in a review by the Health Ministry or local health authority.
“This review is conducted to ensure that the purchasing company or individuals is able to meet the needs of patients and provide quality care,” said Kristy Anderson, a Health Ministry spokeswoman. “If the review is successful, it results in the facility receiving a licence to operate.”
Here are five things to consider:
1 There was near zero opposition when Anbang finalized its $1 billion-plus purchase of the Bentall Centre in downtown Vancouver in 2016. However, both the federal and provincial opposition health critics, among others, have raised issues about overseeing the standard of care that Retirement Concepts will provide under Anbang ownership. There is also the question of how the deal met current requirements set by the Investment Canada Act.
2 Anbang said its interest in Retirement Concepts is motivated by a desire to learn about quality seniors care so it can offer such services in China, where the market for this is vast and nascent, according to sources familiar with the deal.
3 This would be an acquisition that looks different to anything else Anbang has bought or tried to buy. Most of its overseas deals have involved insurance companies, including ones in Belgium and South Korea, or hotels in North America. It bought the Waldorf Astoria hotel in New York for $1.95 billion US in 2014. It has bought several other hotels in the U.S. and Canada.
4 Some of the purchases Anbang has pursued in the U.S. and Europe have failed because regulators and investment bankers haven’t been able to figure out who owns the company. The New York Times sent Chinese-speaking reporters and assistants into remote villages and office towers. They found a fuzzy picture of almost 40 shell companies linked to the Anbang chairman’s wife, the granddaughter of former Chinese leader Deng Xiaoping; Chen Xiaolu, the son of a notable general; and a few, little-known Chinese state-owned companies.
5 Legal experts point out the remarkable speed with which this deal was approved by the federal government, considering the layers of ownership and the sheer task of translating and verifying supporting documents from Chinese to English.
Retirement Concepts facilities on the Island
Retirement Concepts has seven facilities on Vancouver Island:
• Beacon Hill Villa, Victoria
• Selkirk Seniors Village, Victoria
• The Wellesley, Victoria
• Stanford Seniors Village, Parksville.
• The Gardens at Qualicum Beach, North Qualicum Beach
• Comox Valley Seniors Village, Courtenay
• Nanaimo Seniors Village, Nanaimo