Medtronic invests in Chinese medical-device manufacturer

Acquiring a 15% stake in Hong Kong-based Shandong Weigao Group Medical Polymer Co. Ltd., medical-device manufacturer Medtronic (Minneapolis) will launch a joint venture to market products for the spine and orthopedics sector in Asia. Medtronic contributes spinal products to the partnership, with Weigao offering orthopedic devices, including hip, shoulder, spine, and trauma applications. Medtronic will hold a 51% stake in the joint venture, paying $221 million to Weigao through the purchase of 80 million “H” shares for Hong Kong $11.138/share (USD $1.13).

In a release announcing the move, Bill Hawkins, Medtronic president and CEO, said, “China is key to our global strategy as we continue to expand our geographic footprint,” adding that Weigao is viewed as “an ideal strategic partner.” For fiscal 2007, Asia-Pacific accounted for $1.195 billion in net sales for Medtronic, behind Europe ($2.811 billion) and the U.S. ($7.900 billion). That figure is up from $1.023 billion in 2006, and $985 million in 2005. In 2007, the company added manufacturing facilities in the U.S. Puerto Rico, Switzerland, and Ireland. According to a Wright Investor’s Service profile, Weigao has more than 5400 employees, and in addition to Chinese sales, it exports its products to more than 18 countries including Germany, Romania, and the U.K.—[email protected]