The deal reflects Medtronic CEO Omar Ishrak’s goal to expand the company’s reach in emerging markets. including a concerted effort to build its business in Brazil, Russia, India and China. The Chinese medical device market could eclipse the American market by the end of the decade, Ishrak has said in the past.
"Kanghui is an excellent fit for Medtronic, accelerating our corporate strategies of globalization and economic value through a leading presence in China, a strong orthopedics product portfolio, and an exceptional management team," executive vice president & restorative therapies group president Chris O’Connell said in prepared remarks. "The integration of Kanghui provides Medtronic a strong position in China’s rapidly expanding orthopedics segment, as well as a high potential platform for development of a global value segment in orthopedics."
Just over a month ago Fridley, Minn.-based Medtronic agreed to drop $816 million cash on China Kanghui Holdings, representing Medtronic’s largest Chinese acquisition to date, the company said.
Founded in 1997, China Kanghui Holdings, a Chinese orthopedic implant maker that went public on the New York Stock Exchange in 2010, markets its products in China and over 28 international markets, according to the company’s website. Last year, Changzhou-based Kanghui bought out a majority stake of a fellow Chinese implant maker, saying it would launch a full line of orthopedic implants in China and international markets by 2014.
Medtronic has started to expand its global stretch for years. The medical device titan last month invested $66.2 million into LifeTech Scientific Corp., a Chinese medical devices maker focused on treating cardiovascular disease.
In August, Medtronic announced plans to build a new R&D center in Shanghai, China. The facility, to be located in the company’s China headquarters, would be the 1st Medtronic "Innovation Center" outside of the U.S. and Europe.
Back in 2007, the company launched a joint venture with Shandong Weigao Orthopedic Device.