Stryker Enters China Race With Trauson Bid

The race to acquire a local foothold in China’s medical device industry is on. Stryker Corp.’s bid to pay $764 million for Trauson Holdings Co. Ltd. would take out China’s second sizable domestic supplier of orthopedic implants. [See Deal] The acquisition of Trauson would give Stryker deep roots into the untapped territories of China’s $1.5 billion orthopedics industry, the so-called second and third-tier markets in lesser developed areas where multinationals haven’t been able to gain access. Those largely unexplored markets present the largest opportunity for growth, but they likely will be difficult for large multinationals to reach as reforms of China’s health care industry make cost a priority, giving an edge to local suppliers like Trauson that can manufacture and sell implants for less.

Trauson – which sells in the spine and trauma markets – is the second shoe to drop after Medtronic PLC closed on the purchase of China Kanghui Holdings...