Midea Group has announced the completion of its controlling-stake acquisition of Esaote, Europe's largest ultrasound equipment producer, which will be folded into the Midea Healthcare Division. Through its earlier acquisition of Wandong Medical, Midea had indirectly held a majority stake in Esaote. With this round of share purchases, Midea has achieved 100% ownership of Esaote. This is Midea Healthcare's second heavyweight cross-border acquisition in the past year, and the first capital move to land since Chen Jinlei, former Vice President of GE HealthCare China, joined Midea Healthcare.

"The best way to preserve an advantage is to step outside your existing ones." That was how Fang Hongbo, Chairman of Midea Group, put it at an internal meeting early this year. In recent years, Midea Group has visibly accelerated its healthcare build-out: from Wandong Medical to Carestream and now to Esaote, Midea Healthcare has quickly joined the ranks of the world's high-end medical imaging players and become a competitor that the global high-end healthcare market cannot sidestep.

Among home appliance giants that have crossed into healthcare, Midea did not move early, but it is the most active and seasoned buyer.

In 2017, Midea acquired KUKA Medical outright for EUR 3.7 billion, and at the same time carved out KUKA's Swisslog Healthcare and surgical rehabilitation robotics assets, formally stepping into medical automation. At the time, Midea also launched a nursing and rehabilitation robotics project as a joint venture with Yaskawa Electric, and formed a strategic partnership with Guangzhou Pharmaceutical Group, targeting three directions: medical robots, hospital smart logistics and healthcare big data. Unlike the portfolio-style M&A play it adopted later, Midea's early healthcare build-out was relatively loose and low in strategic priority. In fact, as early as 2007 Midea set up an internal medical device division that made household therapy appliances and medical temperature-control components, and, drawing on its refrigerator cooling technology, small medical refrigeration equipment. But that division was more like an incubator serving the home appliance business.

The turning point came in 2021. That year Midea pivoted to medical imaging, taking a 29.09% stake in Wandong Medical from Yuyue Technology and other holders for RMB 2.297 billion to become its actual controller. It kept raising its holding thereafter, reaching 45.46% direct ownership of Wandong Medical by the end of 2025, with cumulative capital injections and R&D investment in Wandong exceeding RMB 4 billion.

It was not until April 2025, however, that the Midea Healthcare Division was formally established as the group's sixth core business segment, integrating five businesses: Wandong Medical, KUKA Medical, Midea Biomedical, Swisslog Healthcare and Midea Building Technologies.

Midea Healthcare then stepped up the pace of industrial M&A. In May 2025, Midea agreed to acquire all the equity of 11 subsidiaries under Carestream Health for USD 264.7 million (about RMB 1.862 billion), a deal completed in December 2025. That company is Carestream, formerly the medical imaging arm of Kodak. Kodak sold it for USD 2.55 billion in 2007, and in 2022 it filed for bankruptcy protection as cloud-based film and digital imaging disrupted the market. Through the Carestream acquisition, Midea Healthcare gained important global medical imaging sales channels and product registration qualifications.

In February 2026, Chen Jinlei, former Vice President of GE HealthCare China, joined Midea Healthcare. A healthcare industry veteran who spent 27 years at GE, Chen has a career that spans the long cycle in which China's medical device sector moved from import dominance to import substitution. His arrival was also seen as a signal that Midea Healthcare was raising its level and picking up speed. And the company's completion of full control over Esaote now validates that speculation in a sense.

Behind Midea Healthcare's high-profile, high-stakes play lie both the courage and the frustration of this once-dazzling home appliance champion.

The home appliance industry Midea calls home is rapidly becoming a sunset industry. Data from All View Cloud (AVC) shows that in the 2026 cooling year, domestic air conditioner retail volume reached 68.97 million units, down 14.4% year-on-year, with retail sales of RMB 207.8 billion, down 19.2%, the first time in five years the industry has fallen below the RMB 230 billion peak. In the first eight months of 2026, domestic home appliance retail sales totaled RMB 547.7 billion, down 9.7% year-on-year.

Against this backdrop, domestic home appliance giants are under broad earnings pressure. In the first half of 2026, Gree Electric Appliances posted revenue of RMB 89.398 billion, down 8.15% year-on-year; Haier Smart Home posted revenue of RMB 152.115 billion, down 2.80%, with net profit attributable to shareholders down 14.27%. Midea's revenue and smart home business revenue both recorded slight growth over the same period, but with the industry in overall decline, growth squeezed out of existing demand is clearly not enough for Midea to keep its advantage.

That is why home appliance giants have been moving into healthcare one after another in recent years. Haier builds life sciences and clinical medicine businesses through Yingkang Yisheng, its healthcare ecosystem brand, and already has three listed companies: Haier Biomedical, INKON Life Technology and Shanghai RAAS. In April 2024, Gree joined hands with Zhuhai Huayu Zhichuang to establish Zhuhai Gree Medical Devices, with registered capital of RMB 10 million. Hisense Medical makes color ultrasound systems and 4K fluorescence endoscopes.

Unlike home appliance peers that either dabble superficially or lean on their in-house R&D, the standalone Midea Healthcare has made industrial M&A its single most important strategy at this stage. In Midea's view, appliance giants do not have much time left to build a healthcare business and must make a bold bet. At the group's shareholders' meeting in June 2026, Eric Wang, Vice President of Midea Group in charge of the Healthcare Division, stressed that it takes three to five years to bring a medical product to market, and that neither the policy window nor hospitals' equipment renewal cycles will wait. Through industrial M&A, Midea Healthcare quickly gained what Carestream brought in — a global sales network and registration qualifications in countries around the world — what Esaote brought in — a European brand in ultrasound — and what Wandong Medical brought in — domestic radiology imaging and DR capacity.

Esaote, the prize Midea Healthcare has now taken into its fold, is Europe's largest ultrasound equipment producer and was founded in 1982 in Genoa, Italy. Over nearly half a century, Esaote has rolled out a rich portfolio across three segments: ultrasound, open low-field MRI and healthcare IT, producing more than 9,000 ultrasound systems a year and covering more than 100 countries.

In fiscal year 2025, Esaote reported revenue of EUR 267 million, 70% of it from overseas, with about 1,160 employees, 20% of them in R&D. According to Midea Group's official press release, Esaote ranks among the world's top ten ultrasound equipment manufacturers, and by global installed base it is one of the world's six largest ultrasound manufacturers, with a cumulative installed base of more than 130,000 units.

Ultrasound is Esaote's most valuable asset. Its 3% share of the global ultrasound market is hardly conspicuous next to giants such as GE HealthCare, Philips, Siemens Healthineers and Canon Medical, yet Esaote holds a standout advantage in fast-growing ultrasound subsegments such as musculoskeletal and vascular imaging. In global clinical applications of ultrasound, cardiovascular ultrasound accounts for 28%, while musculoskeletal and vascular ultrasound are the fastest-growing directions, projected to grow 12.8% in 2026.

In the past, general-purpose vendors treated musculoskeletal imaging as little more than a software package on a universal platform and sold whole machines, whereas Esaote builds its complete systems, probes and clinical protocols around musculoskeletal use: its MyLab series is paired with LMX, IHX and other linear array probes with frequencies above 20 MHz, and 25 MHz-class ultra-high-frequency probes are used to observe fine structures in fingers, wrists, superficial tendons, cartilage and peripheral nerves. Doing musculoskeletal work on a universal platform forces compromises in overall system performance, while a system designed specifically for musculoskeletal imaging can pull ahead in superficial structures. In a sense, Esaote is not a scaled-down GPS; it is the player that has gone deepest into a single vertical field where even the GPS players rarely place bets.

In addition, dedicated MRI is Esaote's highest-barrier business and the part of the global market whose structure is shifting fastest. In 2025, the global MRI market was worth about USD 9.97 billion, and Esaote chose an even narrower opening within it, focusing on the musculoskeletal MRI market. This is an open MRI, and its core value lies in letting doctors image under weight-bearing conditions and assess joints under real load. Examination compliance improves markedly for patients with claustrophobia, pediatric patients and larger patients, and dedicated systems can shorten scan time by about 34% versus conventional approaches.

In 2025, the global musculoskeletal MRI market was valued at USD 5.45 billion and is expected to reach USD 10.01 billion by 2035, a compound growth rate of 6.28%, with the expansion of orthopedic and sports medicine centers directly driving installation demand. Data shows that in 2025, Esaote accounted for as much as 35% of the global open MRI market, far ahead of a field of little-known competitors.

Before Midea Healthcare took full control, Esaote had gone through nearly a decade of Chinese ownership. In December 2017, Wandong Medical, together with five other investors including Yunfeng Capital, Yuyue Technology and Shanghai Tianyi Industrial, signed an equity transfer agreement to acquire a majority stake in Esaote for EUR 248 million; the deal closed in April 2018 at EUR 232 million. After the acquisition, Yuyue Group led operations and management, with Wu Guangming serving as Chairman of the Esaote Group, and the company reached break-even the next year and turned profitable the year after that.

In 2021, Midea bought control of Wandong Medical for roughly RMB 2.3 billion, gaining indirect entry into Esaote's governance structure with a stake of about 22.5% before this acquisition. On October 9, 2026, Midea took the remaining 77.5037% of shares through its Midea Imaging Acquisition M&A Fund, so that a company jointly run by a Chinese consortium for nine years finally came into the hands of a single shareholder.

After coming under Chinese ownership, Esaote's operating curve headed steadily upward. In 2020, Esaote's EBITDA (earnings before interest, taxes, depreciation and amortization) rose from EUR 25.4 million to EUR 34 million, an increase of 33.8%. By fiscal year 2023, its operating performance reached a new high, with net sales of EUR 273.2 million, up 6.5% year-on-year. Although revenue slipped back to EUR 267 million in fiscal year 2025, CEO Franco Fontana said at a shareholders' meeting that the group had averaged 7.6% annual growth over the previous four years. Notably, Esaote has long achieved little in the Chinese market, which undoubtedly leaves Midea Healthcare plenty of room to imagine.

By taking full control of Esaote, Midea Healthcare gains its most tangible benefit: the leap from selling equipment to selling solutions. For medical imaging, where import substitution is entering deep water, the importance of device makers being able to sell solutions is self-evident. In the medical device market, hospitals are often not buying a single machine but complete solutions for the radiology department, operating rooms, the medical technology building and the outpatient pharmacy, and different departments often fall to different brands. That fragmentation gives latecomers an opening to enter with an integrated solution.

With the merger complete, Midea Healthcare has filled out its categories for the first time. On the clinical and medical technology side, Wandong Medical supplies DR, CT and large high-field MRI, Carestream supplies a global X-ray product line and registration qualifications, and Esaote supplies ultrasound and open dedicated MRI; on the hospital construction and operations side there are Swisslog's pharmacy and in-hospital logistics and Midea Building Technologies' smart hospital design. A broad catalog is not itself a moat, since a hospital can assemble the same list by buying from scratch. What really works is that this list can appear under the name of one supplier in one bid document. That is the advantage of a platform product strategy on the procurement side. Centralized procurement has narrowed hospitals' choices, making cross-department, cross-category bundled quotations an unavoidable competitive dimension, and comparisons among suppliers have escalated from the winning bid price of a single device to the delivery capability and total cost of ownership of an entire solution. Midea does not have to be the best on every device; it only has to be the option that can be written into the bid document as an integrated solution.

But M&A does not equal integration. From unified equity to unified operations and unified products, Midea Healthcare still has a way to go.

After all, with Wandong Medical, acquired earlier, Midea Healthcare is going through an awkward period. In 2025, Wandong Medical's revenue was RMB 1.347 billion, down 11.64% year-on-year, with a net loss attributable to shareholders of RMB 228 million, its first annual loss since listing in 1997, and its main-business gross margin fell to 26.56%, down 9.07 percentage points year-on-year. In the first half of 2026, revenue reached RMB 875 million, up 3.71% year-on-year, but the net loss attributable to shareholders was still RMB 91.67 million, with gross margin at 24.94%, down 10.22 percentage points year-on-year. Revenue is back; profit is not.

For the healthcare industry, integration often starts from zero. First, the integration cycle is longer than the pace at which a business itself can adjust. At the moment an acquisition closes, the target's capacity, technology and channels are all still where they were; improvements in the financials can only appear after product lines are connected, R&D rhythms aligned and cost structures restructured. That gap is usually measured in years, while the market's patience with M&A is often only a few quarters. KUKA posted losses for years in its first years within Midea, with robotics and automation systems revenue falling from RMB 27.037 billion to RMB 21.589 billion; Hiconics logged large consecutive losses in its early days and took four years to turn profitable. Neither case was a matter of buying the wrong assets; rather, the hurdles between buying and integrating well take longer to clear than the business itself takes to adjust.

Second, resource commitments at the shareholder level do not equal operational capability. Capital injections, R&D spending and channel introductions are all undoubtedly necessary conditions for industrial integration, but once resources are provided, they still have to pass through an entire chain: product definition, clinical validation, registration and certification, and hospital access. If any link fails, the money may stall outside the financial statements. In healthcare, the length of the translation chain is unaffected by additional investment; it is constrained by the inherent cycle from project initiation to product launch, which is also what sets this industry apart from ordinary manufacturing M&A.

Finally, stacking assets often makes old problems more complicated. From an equity perspective, M&A resolves asset ownership, but it may also create business overlaps. If product lines, channels and internal competition overlap within the same group, issues of competing businesses arise; such commitments usually take years to be honored, and cross-border deals must add another layer of local regulatory and compliance costs. And the price ceiling is something M&A cannot buy away: when price pressure comes from centralized procurement and tendering mechanisms, the premium that technology and brand can command gets squeezed, and the same high-end category may see a far steeper decline than ordinary categories once it enters centralized procurement.

Of course, Midea's senior management knows well that healthcare is unlike home appliances, that it is a slow business and that performance is not the only consideration, but the market's patience is always limited. The tests facing Midea Healthcare have entered a new cycle too.