(Yicai) Dec. 11 -- Shares of Sanyou Medical fell to the lowest since July last year after the Chinese medical device maker announced plans to become the controlling shareholder of French peer Implanet.

Sanyou [SHA: 688085] dropped 3.3 percent to CNY18.86 (USD2.63) in Shanghai today. The stock closed at CNY18.35 on July 13, last year.

Sanyou’s Hong Kong-based unit will purchase newly issued shares of Implanet for 4 Euro cents (4.3 US cents) apiece for a total of EUR5 million (USD5.4 million), the Shanghai-based company announced late on Dec. 8.

After the acquisition, Sanyou will raise its stake in Implanet to between 78.5 percent and 85.4 percent from 41 percent, thus becoming the French firm’s largest shareholder, Sanyou added. The company invested EUR5 million in Implanet last year.

Once the transaction is completed, Sanyou will introduce Implanet’s medical device technology for the treatment of complex spinal diseases into the Chinese market and enrich its product line, Sanyou noted.

Moreover, Sanyou will make full use of Implanet’s existing marketing network in more than 10 countries in Europe, North America, South America, and Asia to export its self-developed innovative treatments and products to the international high-end orthopedic device market, Sanyou added.

Implanet is still in the red, and the acquisition is expected to adversely affect Sanyou’s financial results next year, Sanyou said, noting that if Implanet’s future performance does not meet expectations, it may face the risk of goodwill impairment.

In the first half of the year, Implanet reported an operating income of EUR4.3 million and a net loss of EUR2.3 million. Its net assets as of June 30 were EUR4.3 million.

Editor: Futura Costaglione