Corporate Updates

Medtronic to buy 51% of Chinese medical device maker

US-based Medtronic, Inc. plans to buy a 15% stake in Shandong Weigao Group Medical Polymer Co., Ltd. for HKD 1.73 billion, or USD 220 million, the two companies jointly announced. Medtronic will buy 80.721 million new shares in the Chinese medical device maker at HKD 11.14 apiece as well as 8.72 million non-tradable shares from the latter’s existing shareholders at HKD 10.247 each. After the transactions, Medtronic and Shandong Weigao will create a 51-49 joint venture to market spinal, orthopedic and trauma products in the Chinese market. The former will distribute its devices used in spinal-fusion surgery via the venture while the Shandong company will sell artificial knees and hips. The US company expects that the transactions will benefit its performance in the Chinese market where it gained 2 to 3% of its total sales revenue in 2006. It estimates that the revenue from the Chinese market will overtake that from Japan, which is currently the second largest market for the company after the US.

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