Mindray Medical International Limited was the second largest medical device manufacturer in China with global sales of 2.23 billion RMB in 2007. Since 2002, Mindray had launched between seven and nine new products every year across four product lines: Patient Monitoring & Life Support products, the In-Vitro Diagnostic Products, Medical Imaging Systems and Veterinary. In 2006, Mindray’s American depositary shares (ADS) were listed on the New York Stock Exchange. By the end of 2007, Mindray had sold medical devices to over 37,500 hospitals and clinics in China. It had 12 international offices and its products were sold in more than 140 countries.

However, the company’s US performance had not lived up to expectation and, recently, Mindray founder and chairman Hang Xu had been approached by a leading investment bank to discuss the potential acquisition of Datascope, a mid-sized American producer of medical devices for the global marketplace. What should Xu do?