Medtronic (NYSE:MDT) said it’s closed a $66 million investment in Chinese medical device company LifeTech Scientific (HK:8122).
Fridley, Minn.-based Medtronic said its stake in LifeTech now amounts to about 26.4%.
The deal gives the world’s largest pure-play medical device maker the right of first negotiation to distribute LifeTech products and the chance to boost its ownership in the Shenzhen-based firm, according to a press release.
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The move closely follows the company’s announcement last year that it would pay $816 million to acquire China Kanghui Holdings (NYSE:KH). Kanghui’s product portfolio includes devices for trauma, the spine, joint reconstruction that complement the Medtronic’s own suite of products.
China plays a feature role in many medical device companies’ emerging market strategy. Medtronic CEO Omar Ishrak has not been shy about his intentions for China, a medical device market that he has predicted may outpace the U.S. by the end of the decade. MDT said in 2011 that it was looking to increase its total workforce in China to 2,000 by 2016.
In August 2012, Medtronic VP Simon Li told Chinese reporters that the company is looking to expand its portfolio in China through a series of mergers and acquisition deals, which will be the centerpiece of its strategy for the People’s Republic.
About 2 months into his tenure as CEO, Ishrak made clear that his vision for Medtronic’s future 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, he said.
"The biggest long-term opportunity will be to meet the needs of billions of people who have no access to healthcare at all," Ishrak wrote in an email to employees in August 2011. "The population in emerging markets is tenfold that of developed countries. These statistics are further compounded by the fact that U.S. market is essentially flat. Reaching the global middle class opens up opportunities to us beyond anything we’ve ever seen before."
MDT shares ticked up 0.4% today to $46.83 apiece as of about 12:45 p.m. today.
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