Recent mergers and acquisitions in the ultrasound market

The recent shake-up of the global ultrasound market following the merger of Aloka and Hitachi Medical, and the recently announced acquisition of Medison by Samsung Electronics, points to an intriguing future. Research Analyst Stephen Holloway, author of InMedica’s acclaimed “World Market for Ultrasound Imaging Equipment – 2010 edition” assesses the repercussions.

The world ultrasound market has long been dominated by four major suppliers, (GE Healthcare, Philips Healthcare, Toshiba Medical Solutions and Siemens Healthcare), with a combined market share of almost 65% in 2009. However, the merger in November this year between Hitachi Medical Systems and Aloka may upset such dominance, particularly in the rapidly expanding Asia Pacific market.

“The merger of these two mid-tier vendors is clearly a strategic move to compete with the top-tier suppliers” comments Holloway. Statistics from InMedica’s most recent report shows that combined revenues from Aloka and Hitachi would place them third behind GE and Philips globally, and second in the Asia Pacific market behind GE. “This deal could have significant consequences for the top-tier suppliers” continues Holloway. “Hitachi and Aloka are both significant players in the Asia Pacific market, forecast as the fastest growing market in the world. Combined, they have the resource and sales network to challenge for customers in the rapidly growing ASEAN region and China. However, strongest growth is forecast in the immediate years ahead, so rapid integration of the two companies is vital, in order for the newly merged company to capitalise.”

Further complicating matters is the entrance of Korean electronics giant Samsung Electronics, with the recently announced acquisition 43.5% stake of Medison. While less surprising than the Aloka-Hitachi merger, following Samsung’s announced plans earlier this year to invest part of $20 billion into a Healthcare business, it suggests future market competition will be fierce. “Medison’s reputation for quality technology has allowed it to compete with mid-tier suppliers for some time,” adds Holloway, “but lack of major financial backing and resource has prevented Medison from challenging the top five suppliers; Samsung may well drive Medison to that next level. Samsungs’ greater resources combined with Medisons’ technological expertise could prove a strong collaboration”.

So what does the future hold for the global ultrasound market following these developments? “Competition will be fiercer than ever before, particularly in Asia” suggests Holloway. “The recent economic downturn has increased end-user demand for quality systems at lower prices. The key to success will be to provide a flexible portfolio of quality ultrasound systems, software, services and education, for a number of clinical applications, at a variety of price points. In Asia, strongest growth is forecast for the low-end and compact segments; providing quality and functional equipment here will be vital. However, much greater investment and research will be required to compete with the top-tier suppliers in the established North American and Western European markets”

If you would like an interview with an expert in this area, please contact Simon Harris, Snr Research Director, at [email protected]