Mayo Clinic selling off its stake in its first international hospital for $150 million

Jeff Kiger, Post-Bulletin, Rochester, Minn.
·3 min read
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Jan. 30—ROCHESTER — Mayo Clinic is selling off its stake in

its first hospital outside of the U.S.,

the Sheikh Shakhbout Medical City in Abu Dhabi, with a $150 million early buyout of a planned 20-year collaboration.

State-owned Abu Dhabi Health Services Co. filed documents on Jan. 29 stating that it is buying Mayo Clinic's 25,000 shares or 25% stake in the 741-bed hospital in the United Arab Emirates.

The hospital launched in 2019 and a much-hyped partnership started in 2020 with

Mayo Clinic's investment of $50 million in cash "and other intangibles"

to buy "a 25 percent equity position." Mayo Clinic annual financial reports described the partnership as including "a hospital expertise agreement, a brand license agreement, and research contribution agreement."

The initial commitment period was established as 20 years with the option to be extended by 10 years. Sheikh Shakhbout Medical City made a "conditional pledge" of $150 million to Mayo Clinic, which is the amount of the current buyout.

When the initial investment was announced in 2019, Mayo Clinic Chair of Practice Administration Roshanak Didehban stated that "we see this as a very long-term partnership."

Mayo Clinic did not respond to questions about why the decision was made to end the project or how the sale might affect staff working in Abu Dhabi.

Sharon Theimer, Mayo Clinic's communications manager for international media relations, sent a short statement about the end of the project.

"Abu Dhabi Health Services Co. (SEHA) has signed a definitive agreement to acquire Mayo Clinic's interest in Sheikh Shakhbout Medical City (SSMC). Following the completion of the transaction, SSMC will be wholly owned and operated by SEHA. Mayo Clinic and SEHA remain committed to serving patients from the UAE, the surrounding region and abroad," she wrote.

Mayo Clinic did not respond to questions about when the transaction is expected to be completed.

Financial documents show that Mayo Clinic's "carrying value" of its investment in Sheikh Shakhbout Medical City was $87 million in 2020, $89 million in 2021 and $155 million in 2022.

When the project was announced, Mayo Clinic CEO Gianrico Farrugia described the project as being driven by "Mayo Clinic's humanitarian mission as well as our values."

The Sheikh Shakhbout Medical City investment did attract

criticism and skepticism about its purpose.

"A hospital in Abu Dhabi does not exactly speak to the Mayo Clinic's commitment to humanitarian values," wrote Shannon Brownlee, then senior vice president of the Lown Institute, in 2019. "This is really about capitalizing on Mayo's excellent, and well-deserved reputation in order to expand its business opportunities. If the Mayo Clinic really wanted to help humanity, it would build primary care clinics in rural Appalachia, sub-Saharan Africa, or any number of places in the world where people are in real need of medical services, and can't get them because they are too poor."

While Sheikh Shakhbout Medical City was Mayo Clinic's first international hospital, Mayo also has a health care facility in London, which originally started as a joint venture with Oxford University in late 2019. Mayo Clinic bought out Oxford soon after the start of the venture.

The London facility, which is based near Cleveland Clinic's London clinic,

reported a loss of $53.6 million in 2021

following a loss of $11.5 million in 2020.