Johnson & Johnson Buying Synthes in $21.3 Billion Deal

Health giant Johnson & Johnson (JNJ) said Wednesday it will buy U.S.-Swiss medical device maker Synthes Inc. for 21.3 billion, greatly increasing its share of the market for surgical trauma equipment and orthopedic implants.

J&J said it will pay 159 Swiss francs for each Synthes share, comprised of $2 billion in cash and the rest in stock.

The price represents a premium of 8.5 percent on Synthes' closing share price Tuesday.

"Orthopedics is a large and growing $37 billion global market and represents an important growth driver for Johnson & Johnson," CEO Bill Weldon said in a statement.

New Jersey-based J&J said Synthes would complement its own DePuy orthopedics portfolio to address what it called "significant market trends."

These include aging populations and increased rates of obesity, both of which result in greater demand to treat joint disease, it said.

Synthes is based in West Chester, Pennsylvania, but has its global headquarters in Solothurn, Switzerland, and trades on the Zurich exchange.

The sale would make its multibillionaire chairman, Hansjorg Wyss, one of the richest men in affluent Switzerland.

Wyss, a graduate of Harvard, owns a 40-percent share of the company, and his family's trust owns a further 8 percent.

"I am very pleased and excited that my life's work will continue as part of Johnson & Johnson," the 75-year-old said in a statement.

Synthes pleaded guilty last year to a felony and dozens of misdemeanor crimes over unauthorized testing of its bone cement on spinal surgery patients, even though the cement was approved only for use in the arm. Three patients died on the operating table.

Synthes and subsidiary Norian Corp. performed the tests from 2002 to 2004. The companies agreed to pay $23 million in fines.

Johnson & Johnson, meanwhile, has suffered repeated product recalls, resulting in the yearlong closure of a nonprescription medicine factory in Fort Washington, Pennsylvania.


Increase your money and finance knowledge from home

Introduction to ETFs

The basics of Exchange Traded Funds and why ETFs are hot.

View Course »

Asset Allocation

Learn the most important step in structuring an investment portfolio.

View Course »

Add a Comment

*0 / 3000 Character Maximum

1 Comment

Filter by:
frank1946

Cool, the De La Porta (sp. ?) Family must be very Happy that this value is created from a MD who cared about his
Military Patients and wanted to try something new to fix their broken bones !

My leg is full of Synthes stuff, it works great !

April 27 2011 at 7:19 AM Report abuse rate up rate down Reply