Covidien expands market in Brazil, China

Moving to accelerate its emerging-markets strategy, Covidien PLC has acquired a Brazilian electrosurgical manufacturer and entered a joint venture with a Chinese medical stapler manufacturer. More

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Covidien expands market in Brazil, China

Posted 1/15/14

MANSFIELD – Moving to accelerate its emerging-markets strategy, Covidien PLC has acquired a Brazilian electrosurgical manufacturer and entered a joint venture with a Chinese medical stapler manufacturer, the global biotechnology product provider announced Monday.

In Brazil, Covidien has acquired WEM Equipamentos Eletrônicos Ltda., a privately held manufacturer of electrosurgical generators, disposables and accessories based in Ribeirao Preto. In China, Covidien has entered into a shared ownership agreement with the Changzhou Kangdi Medical Stapler Co. Ltd., a manufacturer of open stapler products based in Jiangsu Province, under which Covidien will hold majority control.

The two transactions will enable Covidien to better meet the specific needs of underserved ‘value segment’ markets, including those with hospitals that primarily serve patients facing care affordability challenges, the company said in its announcement.

“These deals accelerate our entry into an increasingly important customer segment that we believe will enable us to grow above market over time and increase access to affordable health care solutions,” said Brian King, president of emerging markets for Covidien. “By combining Covidien’s proven business model with the capabilities of our new partners, we’ll be able to scale the value segment opportunity and help provide more affordable health care solutions in new markets.”

In addition to expanding Covidien’s presence in the emerging markets of Brazil and China – and lowering manufacturing costs – the transactions support the company’s vision to improve patient outcomes and expand global access to care, Covidien said.

Covidien intends to leverage the two companies’ existing product portfolios, manufacturing infrastructure and relationships to build out cost-effective solutions specifically designed for health care providers serving patients struggling to afford care.

The terms of the deals were not disclosed.

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