• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Advertise
  • Subscribe

MassDevice

The Medical Device Business Journal — Medical Device News & Articles | MassDevice

  • Latest News
  • Technologies
    • Artificial Intelligence (AI)
    • Cardiovascular
    • Orthopedics
    • Neurological
    • Diabetes
    • Surgical Robotics
  • Business & Finance
    • Wall Street Beat
    • Earnings Reports
    • Funding Roundup
    • Mergers & Acquisitions
    • Initial Public Offering (IPO)
    • Legal News
    • Personnel Moves
    • Medtech 100 Stock Index
  • Regulatory & Compliance
    • Food & Drug Administration (FDA)
    • Recalls
    • 510(k)
    • Pre-Market Approval (PMA)
    • MDSAP
    • Clinical Trials
  • Special Content
    • Special Reports
    • In-Depth Coverage
    • DeviceTalks
  • Podcasts
    • MassDevice Fast Five
    • DeviceTalks Weekly
    • OEM Talks
      • AbbottTalks
      • Boston ScientificTalks
      • DeviceTalks AI
      • IntuitiveTalks
      • MedtechWOMEN Talks
      • MedtronicTalks
      • Neuro Innovation Talks
      • Ortho Innovation Talks
      • Structural Heart Talks
      • StrykerTalks
  • Resources
    • About MassDevice
    • DeviceTalks
    • Newsletter Signup
    • Leadership in Medtech
    • Manufacturers & Suppliers Search
    • MedTech100 Index
    • Videos
    • Webinars
    • Whitepapers
    • Voices
Home » J&J: $19.7B Synthes buyout should boost earnings

J&J: $19.7B Synthes buyout should boost earnings

June 14, 2012 By MassDevice staff

J&J merges with Synthes

Johnson & Johnson (NYSE:JNJ) and Synthes Inc. officially sealed the deal today after more than a year of wrangling with government authorities, with J&J announcing a reorganized payment structure designed to minimize its tax burden on the merger.

J&J will pay $19.7 billion for the Swiss orthopedics giant, which will be folded into its DePuy business to form the DePuy Synthes Cos. of Johnson & Johnson. The New Brunswick, N.J.-based healthcare conglomerate said it plans to fund part of the deal with overseas cash stores, in lieu of solely with U.S. dollars, in an accelerated share buyback program.

"This is a very exciting day for the people of Synthes and DePuy as we become 1 comprehensive enterprise dedicated to advancing patient care through innovative, total solutions that are developed from a deep understanding of our customers’ needs," former Synthes CEO Michel Orsinger, now DePuy Synthes orthopedics group global chairman, said in prepared remarks. "We are building on the legacy and strengths of 2 great companies to create one organization that will be agile and responsive in today’s evolving health care environment."

U.S. regulators approved the merger on Monday after getting a guarantee that Johnson & Johnson would ditch some of its DePuy orthopedics properties. EuroZone regulators approved the merger in April.

J&J announced yesterday that the merger would add to its bottom line this year by 3¢-5¢ per share, reversing previous guidance that the merger would bring down earnings by 22¢ per share, an "upside surprise relative to prior guidance," according to Wells Fargo analyst Larry Biegelsen.

The guidance change reflects the decision to complete the merger using overseas cash stores from J&J’s Jannsen Pharmaceutical business in Ireland, which puts the merger in a better tax position in the U.S.

Funds from Jannsen will be used to acquire $12.9 billion in JNJ shares from bankers Goldman Sachs and JPMorgan Chase, which J&J will use, along with cash, to pay for Synthes. The move will shield J&J from part of its U.S. tax burden and insulate shareholders from previously expected dilution.

Wall Street lauded the decision, with Jeffries upgrading JNJ shares from "hold" to "buy" and raising its per-share price target to $72. Tax experts similarly approved the measure, with one calling the strategy "kind of brilliant" and another describing it as an "innovation," Forbes reported.

JNJ shares have crept increasingly higher since the new deal structure was announced. Shares closed 1.5% higher at $63.08 last night, and were up another 1.2% to $65.19 as of about 12:20 p.m. today.

"The completion of the Synthes acquisition creates the world’s most innovative and comprehensive orthopedics business and reflects our long-standing strategy of leadership within attractive health care markets," J&J CEO Alex Gorsky said in prepared remarks. "The combination of these two respected leaders – Synthes and DePuy –  will enable us to better serve clinicians and patients worldwide, bring new innovations to the orthopedics and neurological marketplace, and strengthen our ability to compete in developing markets."

The deal, the largest in J&J’s history, was initially confirmed in April 2011 as the healthcare giant was facing a 23% drop in quarterly profits. The merger is expected to change the orthopedics landscape; J&J hopes it will revive its troubled DePuy brand, which is in the midst of a controversial recall regarding metal-on-metal hip implants that fail more frequently expected from clinical trials and may expose patients to toxic chemicals as they erode.

Filed Under: Mergers & Acquisitions, News Well, Orthopedics, Wall Street Beat Tagged With: depuysynthes, Johnson and Johnson

More recent news

  • Comphya raises CHF 7.5 million for neurostim to treat ED
  • Fujifilm launches intelligent automation features for digital radiography
  • Integer appoints former iRhythm CEO to board
  • MMI debuts robotic surgery instruments, digital surgery platform
  • Synchrony Medical wins FDA nod for airway clearance system

Primary Sidebar

“md
EXPAND YOUR KNOWLEDGE AND STAY CONNECTED
Get the latest med device regulatory, business and technology news.

DeviceTalks Weekly

See More >

MEDTECH 100 Stock INDEX

Medtech 100 logo
Market Summary > Current Price
The MedTech 100 is a financial index calculated using the BIG100 companies covered in Medical Design and Outsourcing.
MDO ad

Footer

MASSDEVICE MEDICAL NETWORK

DeviceTalks
Drug Delivery Business News
Medical Design & Outsourcing
Medical Tubing + Extrusion
Drug Discovery & Development
Pharmaceutical Processing World
MedTech 100 Index
R&D World
Medical Design Sourcing

DeviceTalks Webinars, Podcasts, & Discussions

Attend our Monthly Webinars
Listen to our Weekly Podcasts
Join our DeviceTalks Tuesdays Discussion

MASSDEVICE

Subscribe to MassDevice E-Newsletter
Advertise with us
About
Contact us

Copyright © 2025 · WTWH Media LLC and its licensors. All rights reserved.
The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of WTWH Media.

Privacy Policy