Zhitong Finance is informed that the US drug company Cardinal Health plans to acquire the medical supplies business of medical instrument manufacturer Medtronic for nearly $6 billion.

It is reported that Medtronic and Kantler Health have entered the stage of exclusive negotiations, and the transaction may be announced later this month.

Headquartered in Dublin, Ohio, Condé Health is one of the largest pharmaceutical distributors in the United States. It also manufactures medical and surgical products, including gloves, surgical gowns and fluid control products. At the same time, Kantler also operates the largest radiopharmaceutical network in the United States. The company ranks 22nd among Fortune 500 companies and employs 34,000 people worldwide.

In 2015, Kantler Health acquired the Cordis division of Johnson & Johnson for approximately $2 billion, adding medical equipment such as catheters, filters and cardiovascular stents.

The acquisition of the target Medtronic is the world's leading medical device company, and is also the major shareholder of the medical device supplier Xianjian Technology (01302). Medtronic invested in Xianjian Technology in 2012. According to the disclosure information, as of December 29, 2016, Medtronic held 87.68% of shares, which is the largest shareholder of Xianjian Technology.

In recent years, the profit margins of the entire pharmaceutical supply chain, including drug distributors and pharmaceutical manufacturers, have been squeezed due to increased regulation of high drug prices and increased competition. Last year, Kantler Health and its competitors McKesson (McKesson) and AmerisourceBergen (America), the company's share price fell to varying degrees.

Kantler Health has lowered its full-year profit forecast for the pharmaceutical business this year, but this year, the company's share price has rebounded 11.91%, and is now reported at $80.54.