To cut through the noise of the renewed debate surrounding the transfer of the National Maternity Hospital (NMH) to St Vincent’s campus, it is useful to look at the project through the prism of mergers and acquisitions.

This is exactly what we are talking about here, rather than the mere geographical co-location of two medical institutions side by side. Under the agreement brokered by mediator Kieran Mulvey in November 2016, St Vincent’s Healthcare Group (SVHG), through a new subsidiary, would acquire the assets and liabilities of the NMH. The existing NMH entity would continue to appoint directors to the subsidiary. In corporate finance terms, this sits somewhere between an asset purchase and a full merger.

There are legitimate questions around the ethos governing the new hospital and its impact on the availability of all medical procedures, and the recent public discussion around ownership of the land on which it is planned to be built has crystallised this. Yet the issue also reflects a wider power play typical of any M&A situation.

When corporations come together to do a deal, each of them wants their interests best protected. The merger of the National Maternity Hospital and St Vincent’s Healthcare Group is no different. This is what we know of this aspect of the negotiations from the facts established through official documents and answers from the various parties to The Currency’s questions – and the aspects they have kept in the shadows.


The Holles St-based existing NMH is a corporation established by royal charter in 1903 and amended by national legislation in 1936. Although it was never incorporated as a formal Irish company, the entity is described in the Mulvey report as a “trust” and functions as such. Up to 100 governors (89 are listed in the hospital’s 2019 annual report) act as voluntary shareholders. Two are appointed by the Minister for Health and one is the sitting Mayor of Dublin.

Their chairman is the archbishop of Dublin by right, but he de facto no longer sits in this position. Instead, governors elect a deputy chair with effective non-executive leadership responsibility and an executive committee equivalent to a company’s board of directors. The executive committee elects any new governors. The top executive is the master of the hospital, a clinician appointed for a single term of seven years.

St Vincent’s Healthcare Group, meanwhile, is a designated activity company (DAC) run as a non-profit with charitable tax status. It is wholly owned by the Religious Sisters of Charity (RSC), whose foundress Mary Aikenhead established the first St Vincent’s Hospital on St Stephen’s Green in 1834.

The hospital began to prepare for a move to its current suburban location a century later. “On the 5th of July 1934 the congregation of the Irish Sisters of Charity purchased the lands at Elm Park for £24,000 plus fees,” the new maternity’s planning application recounts. “Design of a new hospital on the site began in 1947, foundation works were carried out in 1956-58 and construction of the main Hospital began in 1964. St Vincent’s Hospital, Elm Park opened in 1970.”

Since then, the campus off Merrion Road has evolved into the voluntary, state-funded St Vincent’s University Hospital (SVUH) and the commercial St Vincent’s Private Hospital. Both are run by SVHG, as well as St Michael’s hospital in Dún Laoghaire. 

The current status of the land acquired by the sisters of charity in 1934 is unclear. No title or application appears for it in the Land Registry, which has captured every change in land ownership in Dublin since 2011. SVHG carries €220 million worth of land on its balance sheet, based on a valuation carried out in 2017. 

Although the group’s full land assets are reported to be directly owned by the company, its parking subsidiary Pianora also books €23.5 million in “car park” tangible assets, defined as “land and buildings”. 

The apparent overlap in land ownership surfaced in the HSE’s application for planning permission to build the new maternity hospital in 2017. The file included letters of consent from the site’s two owners listed in the application form – one from SVHG chair James Menton “to confirm that St Vincent’s Healthcare Group is the owner of the lands which constitute the St Vincent’s University Hospital and St Vincent’s Private Hospital Campus”, and one from the religious order’s vicar general Sister Patricia Lenihan “to confirm that the Religious Sisters of Charity is the owner of part of the lands which constitute the St Vincent’s University Hospital and St Vincent’s Private Hospital Campus.”

An Bord Pleanála reported that it later received a legal submission including maps “which outline the lands in the ownership of both owners”. On August 30, 2017, the board granted planning permission to the HSE to build the hospital on the site owned in part by SVHG and in part by the nuns.

In May 2020, as they confirmed the transfer of their ownership of SVHG, the Sisters of Charity also announced in a statement that they “intend to gift lands at the St Vincent’s Healthcare Group sites worth some €200 million.”

When asked for an update this week, a spokeswoman for SVHG said: “SVHG is the freehold owner of the site upon which it is intended to construct the new NMH. The land was transferred from the RSC to SVHG in 2002.”

These competing statements point to continuing ownership rights on all lands for the Sisters of Charity through their ownership of SVHG, to be unwound if and when their shareholding in the group is transferred.

Land – a key asset for the hospital to borrow against

To complete SVHG’s existing corporate picture, its subsidiary Dubki recorded a Bank of Ireland charge on the group’s assets at the time of the leveraged redevelopment of its private hospital in 2010. 

A report on the funding scheme from the Comptroller and Auditor General revealed that “over a number of years, publicly-funded assets had been used as security by SVHG in return for facilities from commercial banks” including the 2010 fixed charge over the entire St Vincent’s Hospital site and the floating charge over all of the present and future undertaking, property, and assets of SVHG.

The report highlighted issues with the protection of the state’s investment in HSE-funded buildings on the campus. For example, the HSE had at the time agreed to provide a €29 million grant for the construction of a new ward block and requested an option to buy the entire publicly-funded facilities in case SVHG failed to provide public health services there. “However, during the course of negotiations, it had become clear that SVHG could not grant the required option because part of the publicly-funded facilities had already been charged in favour of the Bank of Ireland and Ulster Bank.” The report added that SVHG could not grant the HSE security because of existing commitments to “tax investors” in the private hospital.

In the end, the project went ahead with an option for the HSE to buy the property at market value in restricted default situations, such as SVHG becoming insolvent. Bank of Ireland, the HSE, and SVHG also entered a “side agreement” under which, if the hospital defaulted on its bank loan, the HSE had a three-month window to buy the property at market price and deliver the funds to the bank, releasing the charge on the new ward block.

For existing publicly-funded buildings, Bank of Ireland agreed to give the HSE a 45-day window after a default to purchase the properties and pay over 36 months. 

The Comptroller and Auditor General’s report also indicated that after the Bank of Ireland debt and tax investment scheme in the private hospital expired around 2024, the HSE planned to update the deed of covenant obliging SVHG to run publicly-funded facilities as a public hospital.

“This will include a negative pledge restricting SVHG’s ability to grant or dispose of any interest or secure the previously funded facilities without the HSE’s consent. In addition, should a precipitating event occur after that time, the HSE would be able to purchase the [new ward block] and the previously funded public facilities without time restriction in either case. However, the HSE would not have a ‘right to purchase option’ and there might be other parties interested in acquiring the facilities at that time.”

There was no indication of arrangements for the protection of the state’s investment in future facilities, such as the National Maternity Hospital, which was not in the picture at the time. In this particular case, SVHG told The Irish Times last Saturday that once the state leases land to build the new maternity hospital, “the bank cannot take ownership of the site for the duration of the lease.”

The latest format of the proposed structure for National Maternity Hospital’s move to St Vincent’s campus is derived from two sources. The first was the Mulvey report drawn up by mediator Kieran Mulvey in November 2016 after talks to end three years of stalemate between the two voluntary hospitals on the terms of their merger. The second is subsequent talks between state bodies and SVHG on property tenure for the new building.

The Mulvey report focused on the new corporate structure for the merged entity. A new company called National Maternity Hospital at Elm Park DAC (NMH DAC) is due to conduct “the acquisition of all current assets and resources, human and capital, of the NMH (with the exception of the existing hospital building at Holles St)” and “the acquisition of all the appropriate commitments, obligations, liabilities and any other consideration (actual or contingent) of the NMH.” The Holles St property is to be sold and the proceeds, estimated at €50 million in a 2017 letter from SVHG to the Department of Health, ploughed into the new building. 

NMH DAC is to be 100 per cent owned by SVHG, except for a golden share held by the Minister for Health. This gives the state control over the continuation of “reserved powers” for the board of NMH DAC, which guarantee its financial, operational, and clinical independence “without religious, ethnic or other distinction”. These include the retention of the mastership model and other executive appointments.

In turn, the Religious Sisters of Charity agreed to transfer their 100 per cent shareholding in SVHG to a newly formed charity, “St Vincent’s”. 

The National Maternity Hospital’s chartered corporation is set to remain in existence, stripped of its operational assets. It will appoint four directors to NMH DAC, two of whom will also sit on the board of SVHG, and nominate the master for appointment by the board of the NMH DAC. The corporation will also continue its educational and charitable activities.

SVHG is set to appoint four other directors to the DAC, and one will be an expert representing the public interest, appointed by a joint committee of SVHG and NMH appointees.

When it comes to property, the Mulvey report simply stated: “The state will require a “lien” on the hospital in accordance with whatever funding agreements are in place by the state for such capital projects.” This refers to buildings, such as the new ward block mentioned above, where a voluntary hospital builds its own building with a capital grant from the government and is obliged to run it as a public hospital.

There have also been follow-up talks, including an exchange of letters with the Department of Health in May and June 2017 published by SVHG last week. They show that, from a list of outright site transfer, long lease, mortgage, and option to transfer suggested by then Secretary-General Jim Breslin, negotiations with SVHG chair Menton narrowed down the arrangements for the underlying land to a “lease with an option to purchase on a specified default event.”

While Breslin initiated these exchanges as a way of implementing the “lien” provided for in the Mulvey agreement, the government’s position is that they ended up going further than that. Last week, Tánaiste Leo Vardkar told Social Democrat TD Róisín Shortall in the Dáil: “The Mulvey agreement has, in my mind at least, already been departed from by the government in certain aspects. Initially, the building was not to be owned by the state. It is my understanding that this has now been resolved and the state will own the building. That was not originally the case in the Mulvey agreement.”

This follows his previous Dáil statement on June 17, when he kick-started the latest controversy by admitting the government’s “big concern” about land ownership. “That is not being gifted to the state but to a private charity. It is proposed that there be a 99-year lease to the state. We have a difficulty with that. We do not think the safeguards around that are strong enough.” Varadkar also said that “a hospital that is almost fully funded by the state should have a significant number or majority of members of the board appointed by the government” – a requirement never considered in the Mulvey report.

A spokeswoman for the Department of Health gave The Currency the latest state of play this week: “The draft legal framework subsequently developed is designed to copperfasten these arrangements. The clear legal advice provided to the state is that the draft legal framework ensures that all legally permissible medical services will be provided in the new hospital. The draft framework provides that the new hospital remains in state ownership, to be built on a site leased from the St Vincent’s Healthcare Group for 99 years with the potential to extend that for a further 50 years. The NMH DAC, and St Vincent’s Healthcare Group, would be provided with an Operating Licence by the HSE for the provision of services in the new hospital.”

This is the plan, and the government’s questions as outlined by Varadkar above, as Minister for Health Stephen Donnelly enters a fresh round of negotiations with stakeholders.

In M&A terms, the directors of the merging corporations and their investors are in the room, their lawyers have draft documents ready, but each party still wants to have one last attempt at pushing its advantage. At this point, what is done and what remains to play for?


Nearly five years on, the only part of the Mulvey agreement that has been implemented is the incorporation of St Vincent’s Holdings, a company limited by guarantee due to become the new owner of SVHG after the Religious Sisters of Charity’s exit. According to SVHG, the new holding charity “has no Canon Law/Vatican influence”. Its constitution refers to both core values of “human dignity, compassion, justice, quality and advocacy” and to “compliance with national and international best practice guidelines on medical ethics and the laws of the Republic of Ireland.”

The two nuns who sat on the board of SVHG also resigned on May 29, 2017.

Other changes to the ownership and governance of SVHG have yet to happen. While the Religious Sisters of Charity announced on May 8, 2020 that they had received approval from the Vatican to relinquish their shareholding, they remain the sole owners of the group to this day. “We are confident that the St Vincent’s Healthcare Group Board, management and staff will continue to provide acute healthcare services that foster Mary Aikenhead’s mission and core values of dignity, compassion, justice, equality, and advocacy for all into the future,” Sr Patricia Lenihan, by then promoted to superior general, said in a statement at the time. “We will not be involved in St Vincent’s Healthcare Group going forward.”

According to the Dáil motion successfully introduced by Shortall last Wednesday, “the Religious Sisters of Charity received conditional permission from the Holy See to transfer their shareholding to the new company SVHs, with the proviso that ‘the provisions relating to the validity and lawfulness of alienations, found in Canons 638-639 and Canons 1292-1294 of the Code of Canon Law and in Proper Law, are to be observed’, and this requirement provides that the transfer of the Religious Sisters of Charity’s shareholding in SVHG must observe Canon Law and Canon 1293 paragraph two requires precautions to be taken to ‘avoid harm to the Church’ and the definition of harm expressly includes ‘activity which gives rise to grave harm to ecclesiastical teaching’.”

SVHG indicated in last week’s briefing paper that “the RSC share transfer will take place on receipt of the consent letter from the HSE” but initially declined to tell The Currency whether it had requested this consent letter or when.

The HSE did not reply to The Currency’s questions on this process or where it stood, instead referring to the Department of Health and the Ireland East Hospital Group. These two agencies, too, failed to answer and the Hospital Group referred back to SVHG.

The spokeswoman for SVHG finally told The Currency: “In compliance with the Service Level Agreement (SLA) between the HSE and SVUH/SVHG which requires that the HSE is notified of any change in governance, a letter informing the HSE of the proposed transfer of the shareholding of the Religious Sisters of Charity to St Vincent’s Holdings CLG was sent to the HSE in September 2020. We await the ‘consent letter’ from the HSE confirming that they have been notified, as per the SLA, of the proposed change in ownership.”

Why the delay since then, or who is responsible for it, remains unclear.

SVHG also recently published a proposed new constitution dated June 2020 on its website, removing its objective to “conduct and maintain the facilities in accordance with the Health Care Philosophy and Ethical Code of the Religious Sisters of Charity”. “It will be formally lodged with the companies office when the RSC transfers their shares to St Vincent’s Holdings CLG,” the spokeswoman for SVHG said. “For the avoidance of doubt, care is delivered in our hospitals in accordance with the laws of the land and medical council guidelines.”

Chicken-and-egg situation

The upshot is that the Religious Sisters of Charity have remained in full ownership of SVHG and its assets so far, and can still reverse their commitment to exit. Should the National Maternity Hospital merger fall through, they may re-appoint themselves to SVHG’s board and revert to the pre-2017 situation without the need to unwind any corporate modifications. St Vincent’s Holdings CLG, which has not yet been used, may just be liquidated without consequences. 

In a chicken-and-egg situation, the overhaul in the SVHG’s ownership and governance that forms a pre-condition to the merger with the National Maternity Hospital is now suspended to HSE approval, while the State itself has outlined ownership and governance concerns suspending its green light for the deal through a detailed legal agreement allowing all pieces to fall into place.

In its June 22 briefing paper, SVHG said: “A legal agreement has been completed between the Department of Health and the NMH at Elm Park for a new operating licence for the new hospital.” This wording is optimistic for two reasons. 

On the one hand, when queried by The Currency this week about the status of this document, the Department of Health only ever referred to a “draft legal framework”. Both SVHG and the Department declined to share a copy or outline the contents of the document. If there ever was a completed legal agreement, Varadkar’s recent comment has sent it back to the drawing board.

On the other hand, while SVHG states that the agreement was struck between the Department “and the NMH at Elm Park”, this proposed company does not yet exist. Its registration documents are presumably held up in ongoing talks, with major unresolved issues including Varadkar’s request for the government to appoint directors to it. 

The Currency asked both the Department and SVHG who had been the Department’s counterparts in drawing up the legal framework/agreement. Neither gave an answer, only ever mentioning these negotiations in the passive form: “The draft legal framework subsequently developed” (Department spokeswoman); “The negotiations in respect of the legal agreement have been completed” (SVHG spokeswoman).

At multiple junctures since the Mulvey mediation, SVHG has set out its unwavering red lines:

  • “That the efficiency and effectiveness of patient care in SVHG would not be adversely affected;
  • That future campus development would not be disadvantaged;
  • That no project cost would accrue to SVHG; and
  • That the enlarged campus would be operated in line with best international practice.”

Recently, SVHG has insisted on the first of its four points in the defence of its preference to retain ownership of the NMH site. “The new NMH will be over 50,000 square metres, located in the centre of the SVHG campus and will be physically attached to St Vincent’s University Hospital. SVHG will have to demolish existing buildings to clear the site for the new NMH and some departments and services in these buildings will relocate to the new hospital when it is built,” SVHG’s spokeswoman told The Currency.

With floors in the new building accommodating both NMH and St Vincent’s University hospital clinical and non-clinical facilities, SVHG argues that integrated ownership and governance are needed to avoid unnecessary complications. “At its simplest level, if each hospital is owned and governed separately – at what point on the corridor between the two hospitals does the patient transfer from the care of one hospital to the care of another?” the spokeswoman added – not to mention more prosaic aspects such as plumbing and power supply, which have been mentioned in other documents.

All valid points – but why, then, has SVHG accepted that “the new hospital building will be owned by the state”, as clearly stated in the group’s own briefing paper last week? If its legitimate operational concerns are about corridors and utilities, surely ownership of the fabric of the building is more relevant than the underlying land? To this specific question, The Currency received no reply. 

“This has no connection with ownership or return on assets, but rather it guarantees the highest quality services for all patients in all hospitals on campus,” SVHG’s Menton wrote in May 2017, in a letter to the Department of Health. “Any concerns that we hold over ‘ownership’ are not monetary in nature, but rather are concerns about the operation of a safe, integrated system of governance and medical protocols. This is why SVHG cannot countenance any sale or lease of part of the land on site, or any separate ownership of a hospital on site.” 

The contradictions apparent in SVHG’s evolving position – from no sale or lease, to no sale but OK to a land lease, to insistence on integration of the building but instead holding on to ownership of the land – are most easily explained by the second point in SVHG’s red lines. To ensure “that future campus development would not be disadvantaged,” the group must maintain the integrity and value of its land bank.

This does not mean that SVHG regards its land assets just like any commercial landlord, and Menton’s rejection of “return on assets” or any “monetary nature” in the approach to the site reflects the organisation’s non-profit nature. 

Yet a quick look at a map of the NMH site explains why, just like any other corporate body, SVHG is fighting tooth and nail to prevent it being carved out of the wider campus.

NMH site map

St Vincent’s Hospital is nearly 200 years old – older than all other participants in this negotiation, including the state. This is a time horizon familiar to its directors, appointed under the supervision of its historic – and current – nun owners.

In the mid-20th century, their organisation went through the experience of a three-decade effort to buy, sell and move their hospital from one site to another, more appropriate to the needs of modern healthcare at the time. 

When the proposed new National Maternity Hospital becomes obsolete 100 or 150 years from now, so will the facilities on the rest of the campus opened and extended since 1970. The site off Merrion Rd, already in a prime residential location, will likely be at the heart of one of multiple city centres in a multi-million-inhabitant Dublin urban area and better suited to other uses than large-scale healthcare. 

Some time in the 22nd century, SVHG will want to sell it and move elsewhere. A doughnut-shaped property with a state-owned hole in the middle would then be impossible to sell, or else at a significantly reduced value. This value will most likely continue to be allocated to the charitable purpose of making quality healthcare accessible to all, but this does not mean the organisation is prepared to let it be slashed. 

SVHG’s determination to retain ownership of the new NMH site shows that its directors just won’t take that risk.


Post-scriptum: Two days after this article was published, on Sunday, a HSE spokeswoman came back with a reply to The Currency‘s query regarding the status of SVHG’s ownership transfer. It said: “The Religious Sisters of Charity have resigned from the SVHG Board. Under the terms of their Service Level Agreement, St Vincent’s Healthcare Group requires the consent of the HSE to the share transfer, which is to be addressed by the HSE in the context of the finalisation of the draft legal framework for the new National Maternity Hospital.”

As with any M&A negotiation, nothing is agreed until everything is agreed.