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O’Melveny Represents China Kanghui Holdings in Agreement for Acquisition by Medtronic, Inc.

September 28, 2012

FOR IMMEDIATE RELEASE
CONTACT:

Andrea Rodeschini

O’Melveny & Myers LLP

212.326.2251

arodeschini@omm.com

Susan Self

O’Melveny & Myers LLP

213.430.6391

sself@omm.com

 

SAN FRANCISCO, CA - SEPTEMBER 28, 2012 - O’Melveny & Myers LLP represented China Kanghui Holdings (Kanghui) in entering into a merger agreement with Medtronic, Inc., whereby Kanghui will be acquired by Medtronic. The transaction is valued at approximately US$816 million, and expected to close before the end of 2012.

 

The San Francisco-based O’Melveny team was led by partners Paul Scrivano and Portia Ku.

 

About O’Melveny & Myers LLP

With approximately 800 lawyers in 15 offices worldwide, O’Melveny & Myers LLP helps industry leaders across a broad array of sectors manage the complex challenges of succeeding in the global economy. We are a values-driven law firm, guided by the principles of excellence, leadership, and citizenship. Our commitment to these values is reflected in our dedication to improving access to justice through pro bono work and championing initiatives that increase the diversity of the legal profession. For more information, please visit www.omm.com.

 

The following press release was recently issued by Medtronic, Inc.:

 

Medtronic Signs Agreement to Acquire China Kanghui Holdings

Acquisition Advances Medtronic's Globalization Strategy; Provides Strong Local China Operation as well as Broader Orthopedics Participation

 

MINNEAPOLIS and CHANGZHOU, China, Sept. 27, 2012 /PRNewswire/ -- Medtronic, Inc. (NYSE: MDT) and China Kanghui Holdings (NYSE: KH) announced today that they have entered into a merger agreement whereby Medtronic will acquire Kanghui.  The agreement calls for Medtronic to pay approximately $816 million in cash ($30.75 per American depository share).  The total value of the transaction, net of Kanghui's cash, is expected to be approximately $755 million.

 

"China is one of the fastest growing medical device markets with significant scale opportunities, and now Medtronic will establish a bigger and more direct local presence," said Chris O'Connell, executive vice president and president of Medtronic's Restorative Therapies Group, including the Neuromodulation, Spine, Surgical Technologies and Diabetes businesses.  "Kanghui brings Medtronic a broad product portfolio, a strong local R&D and manufacturing operation, a vast China distribution network and an exceptional management team.  This move will provide Medtronic sustainable advantages in the fast-growing Chinese orthopedic segment, as well as a foothold in the emerging global value segment in orthopedics."

 

"This agreement is directly aligned with our corporate strategies of globalization and economic value," said Omar Ishrak, chairman and CEO of Medtronic.  "Kanghui represents a significant investment in China, accelerating Medtronic's overall globalization strategy with an established value segment distribution network and strong R&D and operational capabilities."  

 

As a leading provider of orthopedic devices in China, Kanghui brings a strong product portfolio and new product pipeline in trauma, spine and joint reconstruction.  The combined portfolio expands Medtronic's offerings in orthopedic surgery and complements the company's existing presence in spine, neurosurgery, neuromodulation, advanced energy and surgical navigation.

 

"We are proud of the company we've built and recognize there is a tremendous opportunity to accelerate our global vision by building on Medtronic's size, scale and expertise as part of this combined organization," said Libo Yang, CEO of Kanghui.  "We look forward to bringing to Medtronic our local operating expertise in China, including our wide distribution network, strong local sales and marketing teams, local manufacturing and R&D, as well as our active presence across a number of value orthopedic product lines that are necessary for success in China and other emerging markets."

 

The transaction is expected to close in the next few months and is subject to customary closing conditions, including approval from the shareholders of Kanghui.  Medtronic expects the net impact from this transaction to be earnings neutral for fiscal years 2013 and 2014 as the company intends to offset any dilutive impact of the transaction. 

 

ABOUT KANGHUI

 

Kanghui is a public company founded in 1997 and is headquartered in Changzhou.  It is traded on the NYSE under KH.   

 

ABOUT MEDTRONIC

Medtronic, Inc. (www.medtronic.com), headquartered in Minneapolis, is the global leader in medical technology – alleviating pain, restoring health and extending life for millions of people around the world.