Global medical device manufacturer Stryker is set to acquire Chinese orthopaedic products manufacturer Trauson for $764m in an all-cash transaction.

As part of the acquisition proposal, the company said it would make a voluntary offer to purchase Trauson’s shares for HK$7.50 per ordinary share, an enterprise value of about $685m.

The company plans to use the acquisition to increase its presence in the key Chinese orthopaedic market.

Stryker president and chief executive officer Kevin Lobo said that the acquisition not only marks a crucial step in expanding the company’s presence in China, but also helps it to develop a value segment platform for emerging markets.

"The acquisition of a leading player in the Chinese trauma and spine market underscores our commitment to strengthening our presence globally," Lobo said.

"As part of the acquisition proposal, the company said it would make a voluntary offer to purchase Trauson’s shares for HK$7.50 per ordinary share, an enterprise value of about $685m."

"With its research and development expertise, manufacturing capabilities and strength of its distribution network, Trauson is a compelling opportunity for Stryker to drive growth in China and other emerging markets for years to come."

Stryker said that the controlling shareholder of Trauson, Luna Group, has agreed to accept the acquisition offer and tender 61.7% of the Trauson shares in accordance with the same.

Stryker and Trauson have had a business association since 2007, when they signed an OEM agreement for instrumentation sets.

Trauson chairman Fuqing Qian expressed hope that the combined strengths of both companies in several areas will provide competitive advantages in the orthopaedic industry while realising the future growth prospects in China and worldwide.

"The orthopaedics market in China has great growth potential," Qian said.

The transaction, which is likely to be completed by the end of second quarter of 2013, is subject to customary conditions.

Barclays Capital gave financial advice and Sullivan & Cromwell offered legal couselling to Stryker during this transaction.