Johnson & Johnson (
nearing an acquisition of a Swiss manufacturer of trauma surgery
equipment, which one knowledgeable source said represents the
company's "gaping hole."
The Wall Street Journal reports the acquisition for Synthes (SYST)
would run about $20 billion, which would the biggest acquisition
ever. The purchase would revive JNJ's medical device interests,
which - like other companies' - has slumped in recent years because
of the economic recession.
"It's the gaping hole in [JNJ's] orthopedic portfolio, so Synthes
really is a good match for them," an unnamed source described as
familiar with the industry told the publication. Synthes "pretty
much built the trauma market."
Acquisition discussions between the two companies are tenuous and
no time frame has been set, according to unnamed sources cited by
Orthopedic devices represent a $28.3 billion market and the company
with headquarters in Switzerland and the U.S. generates almost half
of the plates and screws used to repair broken bones. Dupuy, a JNJ
unit, sells those type of plates and screws but not on a scale
anywhere near Synthes or two other rivals.