Weigao and Medtronic Reaffirm Commitment to Strategic Cooperation

Date：2013-08-15

The leading medical device manufacturer in the PRC, Shandong Weigao Group Medical Polymer Company Limited (“Weigao” or the “Group”; Stock code: 8199) and Medtronic, Inc. (NYSE: MDT) announced that in connection with the non-binding letter of intent (LOI) entered into on March 11, 2007 among Weigao Group, its parent company, Weigao Holding Company Limited (Weigao Holding), certain of its management shareholders and Medtronic, both parties have agreed to reaffirm their commitment to strategic cooperation. They also have agreed to negotiate the terms and conditions relating to the proposed equity investment by Medtronic of 15% of the enlarged share capital of Weigao Group (the “Proposed Investment”) by December 17, 2007.
In reaffirming their commitment to exploring strategic and cooperative business relations with one another, Weigao Group and Medtronic have in principle agreed that Weigao Group would issue and sell to Medtronic 80,721,081 new H shares, which would represent 7.5% of the enlarged share capital of Weigao Group, and Weigao Holding and certain management shareholders would sell to Medtronic 80,721,081 existing domestic shares, which would represent 7.5% of the enlarged share capital of Weigao Group. The per share purchase price for the new H shares is HK$11.138 per H share, which has been determined based on the average closing price of Weigao Group’s ordinary H shares during the 25 trading days immediately prior to the date of the LOI. The per share purchase price for the domestic shares is equal to that of the new H shares adjusted by a discount of 8%, which adjustment is
intended to account for the illiquid nature of the domestic shares. As currently contemplated by the parties, following the closing of the Proposed Investment by Medtronic, Weigao Holding and certain management shareholders’ will hold an aggregate of 52.7% of the enlarged share capital of Weigao Group.
Weigao Group and Medtronic also announced that in continuance of their respective exploration of various business and cooperative opportunities in manufacturing and distribution in the spinal, orthopedic and trauma sectors, the parties have commenced discussions regarding a potential joint venture alliance in China (the “Proposed JV”). In respect to the Proposed JV, Weigao Group and Medtronic have agreed to further investigate other strategic opportunities for cooperation in manufacturing and distribution. As a result, it is contemplated that they would agree to certain restrictions on business activities related to the business of the Proposed JV.
While substantial progress has been made by the parties with respect to negotiating the terms and conditions of the Proposed Investment and Proposed JV, Weigao Group and Medtronic recognize that more time will be needed in order to finalize definitive agreements. As such, Weigao Group and Medtronic have agreed to continue discussions on an exclusive basis, with a view to executing binding agreements by December 17, 2007.
Mr. Chen Xue Li, chairman of the Weigao Group, commented, “Significant progress has been made by Weigao and Medtronic since the signing of the LOI. We believe that the opportunities presented by strategic cooperation between us and Medtronic through a joint venture will be valuable to both parties and will allow us to leverage the respective strengths of each other to considerable success.”
Jean-Luc Butel, senior vice president and president of the Asia Pacific region for Medtronic, said, “China is a key to our global strategy, and Weigao is an ideal strategic partner for us in China. Both companies likely will benefit from our combined strengths, specifically Weigao’s excellent reputation and unparalleled presence in China and Medtronic’s industry expertise and global reach.”
About Weigao Group
Based in Shandong province, PRC and listed on the Hong Kong Stock Exchange, Shandong Weigao Group Medical Polymer Company Ltd.
(http://www.weigaogroup.com) is the leading manufacturers of single-use medical devices and consumables with well known brands in China such as Jierui and exports to more than 30 countries. The Company has a comprehensive range of innovative product portfolio including single-use consumables (infusion sets, syringes, blood transfusion sets and blood bags), orthopedic, cardiovascular stent and blood purification products. The Company also has a nationwide sales network and an effective sales coverage of China’s hospitals.
About Medtronic
Medtronic, Inc. (www.medtronic.com), headquartered in Minneapolis, Minnesota, United States, is the global leader in medical technology — alleviating pain, restoring health, and extending life for millions of people around the world.
Any forward-looking statements are subject to risks and uncertainties such as those described in Medtronic’s Annual Report on Form 10-K for the year ended April 27, 2007. Actual results may differ materially from anticipated results.