Medtronic Completes Minority Investment in China
BY JOHN MCCORMICK, DECEMBER 18, 2008
Medtronic announced today that it had completed its long-awaited minority investment in Shandong Weigao Group. As a result of the investment, Medtronic now holds a 15 percent equity stake in Weigao.
To facilitate the equity investment, Medtronic purchased its 15 percent equity interest in Weigao for approximately HK$1.7 billion (or US$221 million) through a special class of Weigao shares listed on the Hong Kong Stock Exchange.
Earlier this year, Medtronic's relationship with Weigao had been facilitated through a Chinese joint distribution venture to market Medtronic spinal products and Weigao's broad range of orthopedic products. Medtronic holds a 51% interest in the joint venture and Weigao holds the remainder.
This does represent a further development in Medtronic's push for the Chinese market. We view an outright acquisition of Weigao as unlikely given the strict controls the Chinese government places on majority ownership by foreign nationals.
