EU clears J&J’s $21B Synthes buyout | Wall Street Beat

April 19, 2012 By MassDevice staff Leave a Comment

Johnson & Johnson‘s (NYSE:JNJ) move to ditch its DePuy trauma business mollified EuroZone anti-trust regulators enough to win their approval for its $21.3 billion buyout of Synthes Inc.

The deal, announced April 3, would see Biomet Inc. acquire DePuy Orthopaedics’ global trauma assets for $280 million in cash. That eliminated the European Commission’s concerns about "very high combined market shares" in the trauma market, according to a statement emailed to BusinessWeek.

"We obtained remedies to ensure that competition will remain strong in these markets, for the ultimate benefit of patients and social security systems," EU Competition Commissioner Joaquin Almunia said in the statement.

It’s been a year since J&J’s CHF 159-per-share offer for the Swiss orthopedics giant. EU regulators expanded their probe into the deal last November, prompting J&J to seek ways to appease the commission. Last month rumors that the competition panel was set to give its blessing set Wall Street abuzz, but J&J waited until early April to make its deal with Biomet official.

Johnson & Johnson must still satisfy anti-trust officials in the U.S.

The company this week reported adding 12.5% to its bottom line during the first quarter, despite a $271 million after-tax charge on costs associated with its recalled DePuy ASR hip implant.

J&J posted profits of $3.91 billion, or $1.41 per share, on sales of $16.14 billion for the quarter, for essentially flat sales compared with profits of $3.48 billion, or $1.25 EPS, on sales of $16.17 billion during Q1 2011.

Intuitive Surgical CEO Guthart practices the Buffett rule

One of them, at least.
Gary Guthart, president & CEO of Intuitive Surgical (NSDQ:ISRG), quoted Warren Buffett when asked about a share buyback.

Buffett’s rule is that buybacks only make sense when a company has enough cash to run the business and if its shares are significantly undervalued.

"I think [Buffett] says it right. I think we are happy to emulate his behavior here," Guthart told investors during a conference call discussing ISRG’s Q1 results.
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Boston Scientific (NYSE:BSX): Barclays Capital maintains "3-underweight" rating, $6 price target.
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