Johnson & Johnson and Synthes announce definitive merger agreement


Johnson & Johnson and Synthes have announced that they have entered into a definitive agreement whereby Johnson & Johnson will acquire Synthes for CHF159 per share, or US$21.3 billion. Upon completion of this transaction, Synthes and the DePuy companies of Johnson & Johnson together will comprise the largest business within the Medical Devices and Diagnostics segment of Johnson & Johnson.

Under the terms of the agreement, each share of Synthes common stock, subject to certain conditions, will be exchanged for CHF55.65 in cash and CHF103.35 in Johnson & Johnson common stock. The transaction has an estimated net acquisition cost of US$19.3 billion as of the close of business on 26 April 2011, based on Synthes approximately US$119.5 million fully diluted shares outstanding and approximately US$2 billion in cash on hand as of signing.


The boards of directors of Johnson & Johnson and Synthes have each approved the transaction. Hansjoerg Wyss, Synthes founder and chairman of the board, and related parties have agreed to vote shares representing not less than 33% of Synthes common stock in support of the transaction.


DePuy offers one of the most diverse orthopaedics portfolios in the industry, while Synthes is recognised for its innovations in trauma, spine, cranio-maxillofacial and power tools. Together, the companies will offer surgeons and patients a unique breadth and depth of technology and service worldwide to meet their orthopaedic needs.


“DePuy and Synthes together will create the most innovative and comprehensive orthopaedics business in the world and enable us to better serve clinicians and patients worldwide,” said Bill Weldon, chairman and chief executive officer of Johnson & Johnson. “Orthopaedics is a large and growing US$37 billion global market and represents an important growth driver for Johnson & Johnson. Synthes is widely respected for its innovative high-quality products, world-class R&D capabilities, its commitment to education, the highest standards of service, and extensive global footprint.”


“The combination of Synthes and Johnson & Johnson, two organisations focused on the best patient care and improving health care throughout the globe, is a very exciting and promising one. It will ensure that physicians and hospitals will receive the utmost possible support in cooperation with the AO Foundation to help their patients,” said Wyss, founder and chairman of Synthes. “The Synthes family will find a great home and support from Johnson & Johnson and will continue operating with its distinct culture and excellence in product development and physician education together with the AO Foundation. I am very pleased and excited that my life’s work will continue as part of Johnson & Johnson.”


Michel Orsinger, president and CEO of Synthes commented, “Synthes and Johnson & Johnson are both respected as global leaders, sharing the mission of delivering the highest possible standard of patient care 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.”



DePuy and Synthes would bring:


  • Product development capabilities and robust pipelines from the two organisations, as well as potential for technology convergence across Johnson & Johnson that would target transformational innovation to enhance patient care;
  • Global reach to bring a broader portfolio of orthopaedics solutions to more people around the world in developed and particularly in emerging markets; and
  • Renowned leadership and expertise in professional education, and commitment to serving the medical community.


Synthes and DePuy would be well positioned to address significant market trends. These include an aging population, patient desire to remain active, increasing rates of obesity and the resulting impact on joint disease, growing treatment demands in emerging markets, and a movement toward earlier intervention.


The transaction is expected to close during the first half of 2012.