J & J pays $21.6 billion to the Synthes buy

1:41 AM billion, Synthes No Comments

Zurich - is Johnson & Johnson, Swiss medical devices maker Synthes Inc. ever buy for $21.6 billion (CHF 19 billion) in its largest, to buy increase the orthopaedic business and reshaping the industry.

US healthcare group said the two companies 159 francs in bar and shares per share of Synthes is charged on Wednesday. That was a premium of 8.5 percent of Synthes share price is closed on Tuesday.

Had an agreement to Synthes on 18 April said it was expected in talks with J & J.

The acquisition, which expected to 2012 is in the first half of the year in the vicinity, has the support of Synthes and J & J-boards and be a leader in equipment for the treatment of trauma of J & J.

Synthes, sales of $3.7 billion in the year 2010 booked, making nails, screws and plates, broken bones, to fix discs as well artificial spine.

"Orthopaedics is a large and growing 37 billion dollar global market and provides an important growth driver for Johnson & Johnson," said Bill Weldon, J & J's Chairman and CEO.

The transaction is expected to have a modestly dilutive impact on J & J's adjusted earnings per share for 2012.

Crucial is the business support by Hansjorg Wyss, the 40 percent of the Synthes directly and another 8 percent of family trusts, and has was going through as the key to any deal. Synthes holds its annual general meeting on Thursday.

"It is surprising coined the deal between cash and shares." The market consensus, and our opinion was, it would be expected all cash, so the quality is herumgeschleppt slightly lower than us, ", said Morgan Stanley analyst Michael Jungling."

"The take out evaluation particularly challenging seems not." "It is a scarce commodity, and the acquisition of J & J makes number one in the world in orthopedics," Jungling said.

Kepler capital markets analyst Florian Gaiser also said he felt that the premium was not very high.

"The premium... reflects the challenges of Synthes on new ownership passed, Foundation must fully respect the Synthes culture and the close connection of the AO." These elements will limit the chances of the new owner to influence to benefit from the business and synergies, "he said."

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The AO Foundation, which is a key partner of Synthes, has said, leads an agreement does not in any change and existing contractual obligations assumed by the new company would.

A medically guided not-for profit the AO Foundation is organization led by an international group of surgeons specialized in the treatment of trauma and diseases of the musculoskeletal system.

Counter offer unlikely
Under the deal each share of Synthes shares of common stock, which said groups ordinary shares for 55.65 francs in bar and 103.35 CHF in J & J will be exchanged.

Synthes and J & J also said that the transaction had an estimated net cost $ 19.3 billion, as the close of business on 26 April based 119.5 million fully diluted shares and about $2 billion in cash on hand as the signature on Synthes.

Medical device has became the consolidation company counter bid for Synthes want to use economies of scale and new business, analysts doubt someone looking for j & J with one.

"We expect no counter bid as we see industrial buyer J & J as the only logical", said Carla Banziger, Vontobel analyst.

Previously, there was speculation, that J & J, the cash and short-term investments of $27.7 billion 2010, interested at the end of Orthopedics company Smith & nephew PLC British.

Medical devices and Diagnostics 61.6 billion dollar 2010 sales accounted for 40 percent of J & J's, but the business has been hit by competition and recalls in his hip and knee replacement device.

J & J has about 250 separate companies under its umbrella. The group tried, U.S. medical device maker Guidant, buy, which specializes in cardiovascular products several years ago, but was outbid by Boston Scientific Corp.

Cravath represented Johnson & Johnson in connection with this transaction.

Copyright 2011 Thomson Reuters.