Why is there a wave of mergers and acquisitions in the medical device industry in 2021?

Since 2021, the entire medical device industry has announced M&A transactions at an alarming rate
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According to statistics, the medical device industry has generated 33 mergers and acquisitions in the first half of the year alone, and this number has far exceeded the 33 for the entire year of 2020
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It is worth noting that in the global wave of medical device mergers and acquisitions, mergers and acquisitions initiated by domestic medical device companies are actually happening constantly
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Among them, there are at least 8 mergers and acquisitions exceeding 100 million yuan, and the merger parties involved include Shengxiang Bio, Sanyou Medical, Yuyue Medical, and Haohai Bio
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It is understood that the current higher transaction amount is the 791 million yuan acquisition by New Oxygen Technology
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On June 28, New Oxygen Technology, an Internet medical beauty platform, announced that it plans to spend 792 million yuan to acquire Qizhi Laser.
The transaction is expected to proceed in the third quarter of 2021
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Public information shows that the target of the acquisition is a company that produces and operates laser and strong light medical and beauty equipment as its main business.
It develops medical instruments and equipment and machinery manufacturing, which are used in various fields such as medical beauty, skin treatment, and plastic surgery.

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At present, in addition to frequent domestic mergers and acquisitions, it is worth mentioning that overseas Chinese companies are also active buyers, and they are constantly scanning overseas and then introducing them into the Chinese market
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So why have domestic medical device companies initiated mergers and acquisitions so frequently this year? The industry believes that this is mainly due to the lack of domestic medical volume and limited management capabilities in the past, which led to the inactivity of domestic medical device companies in overseas acquisitions
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However, in recent years, as competition in the medical device industry has intensified, the volume procurement policy under medical insurance control fees has put pressure on mature businesses for growth; coupled with the acceleration of product iteration in the medical device field, various factors have brought huge challenges to medical device companies.
Survive pressure
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Therefore, in order to break the corporate ceiling and seize the high-potential market segments, relevant medical device companies can only embark on the fast lane of development by accelerating mergers and acquisitions and license-in
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In fact, in addition to the above factors, in the development of medical device companies, mergers and acquisitions have always been the norm
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And comparatively speaking, medical equipment needs more mergers and acquisitions than other sub-sectors of the medical industry
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This is because, from the perspective of product characteristics, the medical device industry has the attributes of fragmentation and discrete manufacturing.
There is a large gap between the various sub-fields, and the product technology is also undergoing rapid changes.
The impact of new technologies on old technologies is disruptive.

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If a company cannot possess new technologies and cannot further expand its market share, it will be difficult for it to maintain stable growth
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On the whole, the superposition of multiple factors, especially the regularization of the volume procurement policy in many segments, has led to the active mergers and acquisitions of domestic medical device companies
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In the future, the industry expects that a series of domestic medical reform policies will continue to promote innovation in the pharmaceutical industry and continue to squeeze out the "price", which will put a large number of companies under pressure on the traditional business of medical device companies to open up more new battlefields through mergers and acquisitions.

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