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J&J In Talks to Buy Swiss Company Synthes for $20 Billion

April 18, 2011
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Reuters reports, Johnson & Johnson is in preliminary talks to acquire Swiss medical device maker Synthes for a price, which could be about $20 billion, a source familiar with the situation said on Saturday. A deal at that price would mark an 11 percent premium over Synthes'' current market capitalization of about $18 billion. It would allow healthcare conglomerate J&J to further diversify its healthcare business. The medical device sector has been consolidating as pharmaceutical companies look to diversify away from drugs going off patent. News of the talks was first reported by the Wall Street Journal. J&J owns some 250 separate companies under its corporate umbrella and a Synthes purchase would be its largest ever acquisition. The company attempted to acquire U.S. medical device maker Guidant several years ago, but was outbid by Boston Scientific Corp. Medical devices and diagnostics accounted for 40 percent of J&J''s $61.6 billion in 2010 sales but the business has been hit by competition and recalls. J&J has about $19 billion in cash.
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