Johnson & Johnson (J&J) is to acquire Swiss orthopaedic device company Synthes and will merge it with DePuy to create a new global orthopaedics business.
Together, Synthes and the DePuy companies will comprise the largest business within the Medical Devices and Diagnostics segment of J&J.
J&J will acquire Synthes for $21.3 billion.
The acquisition follows a year in which DePuy Orthopaedics has been rocked by a major product recall, threats of litigation and a high-profile corruption scandal.
DePuy – including DePuy Orthopaedics and DePuy Spine – offers one of the industry’s most diverse portfolios of orthopaedic products. Synthes specialises in implants, biomaterials and instruments for the surgical fixation, correction and regeneration of the skeleton and associated soft tissues.
The combined company aims to provide a comprehensive portfolio of orthopaedic products and services that can address such market trends as the ageing population, increasing rates of obesity, and the movement towards early intervention.
DePuy and Synthes will combine their product pipelines and product development capabilities, as well as the potential for technology convergence across J&J. It will bring a broader portfolio of orthopaedic solutions to developed and emerging markets worldwide.
“DePuy and Synthes together will create the most innovative and comprehensive orthopaedics business in the world,” said Bill Weldon, Chairman and CEO of J&J. “Orthopaedics is a large and growing $37 billion global market and represents an important growth driver for Johnson & Johnson.”
Michel Orsinger, President and CEO of Synthes, commented: “Synthes and Johnson & Johnson are both respected as global leaders, and also have very similar company cultures. The combination presents a significant opportunity to jointly bring our products, services and educational offerings to the next level. Together, we will be a more attractive and exciting company for our employees, and a more resourceful partner for our customers.”
The transaction is expected to close in the first half of 2012, subject to regulatory and anti-trust clearance.