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J&J plans Synthes takeover amid talks
By Katie Reid |
April 19, 2011, Tuesday
|
Print Edition
Print Edition
SYNTHES said yesterday it was in takeover talks with Johnson & Johnson, after reports the United States group is looking to buy the Swiss medical device maker for about US$20 billion.
Buying Synthes would allow healthcare conglomerate J&J to further diversify its business, but a deal at US$20 billion would be a premium of less than 9 percent to Synthes's market value last Friday, which some analysts said looked too low.
Shares in Synthes gained 6.2 percent on Friday as talk circulated that J&J or Medtronic could be looking to buy the company.
"In response to market speculation, Synthes Inc confirms that it is engaged in discussions with Johnson & Johnson about a potential business combination transaction," it said in a statement.
Buying Synthes would be J&J's biggest acquisition and would help the cash-rich US healthcare conglomerate further diversify its business by giving it a leading position in equipment to treat broken bones and trauma.
Synthes makes nails, screws and plates to fix broken bones as well as artificial spine discs.
Carla Baenziger, an analyst at Vontobel, said Synthes would double J&J's market share in spine work to about 30 percent, while in trauma it would be the clear leader, with a share of around 57 percent, which could attract the attention of antitrust regulators.
Key to any deal will be Synthes Chairman Hansjoerg Wyss - the second-richest person in Switzerland, with a net worth of US$6.4 billion, according to Forbes - who holds 40 percent of Synthes directly and another 8 percent through family trusts.
J&J owns around 250 separate companies under its corporate umbrella.
Buying Synthes would allow healthcare conglomerate J&J to further diversify its business, but a deal at US$20 billion would be a premium of less than 9 percent to Synthes's market value last Friday, which some analysts said looked too low.
Shares in Synthes gained 6.2 percent on Friday as talk circulated that J&J or Medtronic could be looking to buy the company.
"In response to market speculation, Synthes Inc confirms that it is engaged in discussions with Johnson & Johnson about a potential business combination transaction," it said in a statement.
Buying Synthes would be J&J's biggest acquisition and would help the cash-rich US healthcare conglomerate further diversify its business by giving it a leading position in equipment to treat broken bones and trauma.
Synthes makes nails, screws and plates to fix broken bones as well as artificial spine discs.
Carla Baenziger, an analyst at Vontobel, said Synthes would double J&J's market share in spine work to about 30 percent, while in trauma it would be the clear leader, with a share of around 57 percent, which could attract the attention of antitrust regulators.
Key to any deal will be Synthes Chairman Hansjoerg Wyss - the second-richest person in Switzerland, with a net worth of US$6.4 billion, according to Forbes - who holds 40 percent of Synthes directly and another 8 percent through family trusts.
J&J owns around 250 separate companies under its corporate umbrella.
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