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Johnson & Johnson to Buy Medical Device Maker Synthes for $21.3 Billion (JNJ)
Healthcare products giant Johnson & Johnson ( JNJ ) on Wednesday announced a massive $21.3 billion acquisition of Swiss medical device maker Synthes Inc., in a move designed to boost its market share in the trauma equipment and orthopedic implants spaces.
J&J will pay 159 Swiss francs in cash and stock for each Synthes share, which trades on the Zurich stock exchange. That fetching price represents a 22% premium over the stock's closing price on April 14 - the day before it originally announced it was mulling a buyout offer.
The deal is expected to close in the first half of 2012.
J&J CEO Bill Weldon said in a statement that "Orthopedics is a large and growing $37 billion global market and represents an important growth driver for Johnson & Johnson."
Johnson & Johnson shares fell $1.15, or -1.8%, in premarket trading Wednesday.
The Bottom Line
Shares of Johnson & Johnson ( JNJ ) have a 3.33% dividend yield, based on last night's closing stock price of $64.95. The stock has technical support in the $60 price area. If the shares can firm up, we see overhead resistance around the $66-$68 price levels.
Johnson & Johnson ( JNJ ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.