M&A of medical device companies in China

The merger and integration of Chinese medical device companies are not normal. Some people believe that the main reason for the infrequent mergers and acquisitions in the past is that the domestic medical device market has maintained a growth rate much higher than that of the international mature market, and it can maintain rapid development only by relying on organic growth. In addition, due to business habits, asset prices, and the capital market environment, it is relatively difficult to acquire high-quality domestic assets. A large number of projects seek independent listing, and the merger and integration of listed companies are even more difficult. In addition, the capital market’s recognition of M&A-style development is not high.

At present, in the overseas mergers and acquisitions and cooperation of domestic medical device companies, the “licensein + independent research and development” of medical devices is a very active business model, which also has a certain impact on the domestic medical device innovation pattern. For medical device companies, the first-mover advantage is very important. In the market environment where domestic enterprises frequently introduce overseas products, competition among enterprises will intensify in the future. After the license-in model becomes the norm, the time left for domestic enterprises to innovate in the Me-too model will be shortened, which will be a great test for the innovation strength and innovation differentiation level of enterprises. This requires that domestic medical device companies cannot stay in the imitation stage, and forward-looking thinking and strategic vision are the keys to healthy development. It is foreseeable that with the intensification of competition, some companies will fall behind in the competition, and mergers and acquisitions in the medical device industry will occur frequently in the future.

Mergers and acquisitions can help companies quickly break the ceiling and are an important path for the development and growth of medical device companies. For medical device companies, mergers and acquisitions are not only for expansion but also for survival. Intense external competition may lead to a rapid decline in market share, and mergers and acquisitions can bring about rapid breakthroughs. But not all mergers and acquisitions are successful, and there are many failures in the field of medical devices. With the advent of the era of mergers and acquisitions, consolidating the ability of internal growth is the basis for the success of corporate mergers and acquisitions.

Posted in Medical device knowledge.


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