Medtronic, a medical technology company based in Minneapolis and listed in New York, said on Thursday it will pay $816 million in cash to acquire China Kanghui, a manufacturer of orthopedic devices based in the eastern Chinese city of Changzhou and also listed in New York.
“China is one of the fastest growing medical device markets with significant scale opportunities,†Medtronic executive vice president Chris O'Connell said in a news release. “Kanghui brings Medtronic a broad product portfolio, a strong local R&D and manufacturing operation, a vast China distribution network and an exceptional management team.â€
The deal will give Medtronic a strong presence in China's growing market for medical devices and products used in orthopedic surgery. Revenue from emerging markets including developing countries in Asia, Europe, Latin America and the Middle East accounted for $438 million of Medtronic's total sales of $4 billion during the fiscal quarter ended J uly 27.
Medtronic said the acquisition of Kanghui would not impact its earnings during the 2013-2014 financial years. Profit at Kanghui rose 25 percent to 35 million renminbi, or $5.6 million, in the April to June quarter.
