Shandong Weigao made the acquisition through a joint venture with a private equity-backed firm that will control 10 percent, according to a statement to the Hong Kong stock exchange. The venture will fund $420 million of the purchase with debt, the company said without identifying the private-equity firm.
Argon, which posted revenue of $225 million last year, makes devices including biopsy products, drainage catheters and systems that remove blood clots. Once the purchase is complete, Argon will become one of Shandong Weigao’s “core platforms” for overseas expansion.
The deal comes as Chinese companies have been targeting health-care businesses that give them access to developed markets, particularly the U.S., even as the government has enacted rules to restrict overseas investments. The health-care industry has faced relatively little resistance as the government has encouraged companies to drive innovation to meet local demand for new therapies and build national champions.
Shares of Shandong Weigao fell as much as 4.5 percent in Hong Kong on Monday. The stock has risen 8.1 percent this year, compared with the 25 percent gain in the benchmark Hang Seng Index.