Updated on 26 November 2012
According to Mr Chris O'Connell, executive vice president and president of Medtronic's Restorative Therapies Group, the move gives Medtronic "sustainable advantages in the fast-growing Chinese orthopedic segment, as well as a foothold in the emerging global value segment in orthopedics". The 15-year-old Chinese company brings with it a broad product portfolio, local R&D and manufacturing facilities and a vast distribution network apart from a management team with experience in the region.
The orthopedics market in China is promising. According to GlobalData, a global business intelligence provider, the orthopedic devices market value of Asia Pacific countries in 2011 stood at $7.13 billion. China's market share, only 18.6 percent then, is growing at 15.8 percent CAGR yearly.
The acquisition of China Kanghui Holdings is a significant part of the company's globalization strategy. "Through this acquisition, the combined companies will pursue an exciting opportunity to further expand into the attractive global orthopedics field, as well as globalize Medtronic through a significant direct investment in China," said the company.
Medtronic has had a long-standing commitment in China with presence in the contry since the 1970s. "China, which will be the second largest healthcare market in the world within the next five-to-10 years, is a logical first step for Medtronic's acceleration efforts. China is an important opportunity: its economy and middle class are rapidly growing and the Chinese government has been investing heavily in the healthcare sector infrastructure and in insurance coverage," said Medtronic.
There is also an innovation center in Shanghai and an innovative Patient Care Center in Beijing. It has other operations in Singapore. Acquisition of China Kanghui Holding provides it with local manufacturing in China and there are various education and training centers of the company throughout the Asia region, for example in India, China and Japan.