China’s Shandong Weigao Group Medical Polymer Co. is exploring a potential sale of its US health products business as relations between the world’s two largest economies sour, according to people familiar with the matter.
(Bloomberg) — China’s Shandong Weigao Group Medical Polymer Co. is exploring a potential sale of its US health products business as relations between the world’s two largest economies sour, according to people familiar with the matter.
Weigao Group has hired advisers to help it solicit potential interest in US-based Argon Medical Devices, the people said, asking not to be identified discussing confidential information. A sale could value Argon at more than $1 billion, the people said, adding that the company is expected to garner interest from private equity firms.
There’s no certainty deliberations will result in a sale and Weigao Group could opt to keep Argon, they said. A representative for Argon declined to comment, while a representative for Weigao Group didn’t immediately respond to requests for comment.
Weigao Group, which distributes medical devices and implants, agreed in 2017 to buy Plano, Texas-based Argon for $850 million from RoundTable Healthcare Partners as part of a push to expand internationally. At the time, several Chinese companies were seeking to gain a foothold in the US health-care market through deals to meet demand for new therapies.
But tensions between the US and China have deteriorated in the past few years after several flare-ups over Taiwan, US restrictions on investment in China, rights abuses in Xinjiang and the flight of an alleged Chinese spy balloon over the US in February.
Argon makes and sells medical devices and instruments that health-care practitioners use for surgery and to conduct medical imaging and biopsies. Some of its products include catheters, biopsy instruments and metal filters used to trap blood clots.
Revenue of Weigao Group’s interventional business rose by 9.3% from a year ago to about 1.9 billion yuan ($261 million) in 2022, thanks to the significant growth in the sales of Argon products, especially in China, its annual report shows.
Shares of Weigao Group have fallen about 36% this year, giving it a market value of around $4.7 billion.
–With assistance from Lulu Shen.
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