Shan­dong to ac­quire Ar­gon Med­i­cal De­vices

BioSpectrum (Asia) - - Finance News -

Shan­dong Weigao Group Med­i­cal Poly­mer Co. has agreed to buy closely held Ar­gon Med­i­cal De­vices Inc. for $850 mil­lion, con­tin­u­ing a string of deals by Chi­nese com­pa­nies seek­ing to gain a foothold in the US health­care mar­ket.

Shan­dong Weigao made the ac­qui­si­tion through a joint ven­ture with a pri­vate eq­uity-backed firm that will con­trol 10 per cent. The ven­ture will fund $420 mil­lion of the pur­chase with debt.

Ar­gon, which posted rev­enue of $225 mil­lion last year, makes de­vices in­clud­ing biopsy prod­ucts, drainage ca­theters and sys­tems that re­move blood clots. Once the pur­chase is com­plete, Ar­gon will be­come one of Shan­dong Weigao’s core plat­forms for over­seas ex­pan­sion.

The deal comes as Chi­nese com­pa­nies have been tar­get­ing health­care busi­nesses that give them ac­cess to de­vel­oped mar­kets, par­tic­u­larly the US, even as the gov­ern­ment has en­acted rules to re­strict over­seas in­vest­ments. The health­care in­dus­try has faced rel­a­tively lit­tle re­sis­tance as the gov­ern­ment has en­cour­aged com­pa­nies to drive in­no­va­tion to meet lo­cal de­mand for new ther­a­pies and build na­tional cham­pi­ons.

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