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Discussing the Recent Management Changes at Medtronic

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Overview

Recently, Medtronic (MDT) underwent a series of management changes, as the vice president of the company’s minimally invasive therapies group (or MITG), Bryan Hanson, left to join Zimmer Biomet Holdings (ZBH) as the CEO. Medtronic’s business groups are shown in the chart below.

Effective immediately, Chris Lee was appointed to the position of the president of the APAC region. He previously served as the senior vice president and president of the Greater China region of Medtronic. He will serve as the interim president of the Greater China region until a permanent successor to the position is appointed.

Lee previously served as president of Medtronic’s Greater China region (comprising China, Hong Kong, and Taiwan) since 2012 when the company acquired Bayer Healthcare. His responsibilities included talent management and commercial operations in the region. He also played an important role in liaising with the Chinese government. Under his leadership, revenues in the region rose from $0.6 billion in fiscal 2012 to $1.6 billion in fiscal 2017.

On the day of the announcement, MDT stock declined 1.7%. The iShares Core S&P 500 ETF (IVV) also registered a price decline of ~0.86% on the same day. MDT accounts for ~0.49% of IVV’s total holdings.

New appointments

On December 19, 2017, Medtronic announced the appointment of Bob White as executive vice president and president of its MITG business. He previously served as senior vice president and president of Medtronic’s APAC (Asia-Pacific) region.

White has worked with Medtronic since 2015 when the company acquired Covidien. At Covidien, he served as president of its Respiratory and Monitoring business and president of its Emerging Markets segment. With the completion of the acquisition, Bob White assumed the position of president of Medtronic’s APAC region.

Since White assumed his responsibilities as president of the APAC region, the revenues in the region have grown from $2.1 billion in fiscal 2015 to $3.4 billion in fiscal 2017. He previously worked with General Electric (GE) and IBM (IBM).

Management’s comments

Omar Ishrak, chairman and CEO of Medtronic, stated, “Bob is uniquely qualified to take on the MITG role given his prior leadership experience in the former Covidien company and his most recent role as President of our APAC region, where he was responsible for advancing MITG and our three other groups in the region.

Ishrak added a comment regarding Lee’s appointment, noting, “Chris has strong experience across Asia Pacific, having previously led the operations of several leading pharmaceutical companies in the region. Both Bob and Chris have strong records of delivering results, and I look forward to working with them in their new roles.”

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