Synthes shares jump on rumor J & J deal in the works
Shares of U.S.-Swiss medical device maker Synthes jumped Friday after a report that it's in talks to be bought out by health giant Johnson & Johnson.
Johnson & Johnson would not say whether it's negotiating with Synthes Inc., a maker of surgical instruments, implants and materials for repairing bone and soft tissue, in a move to boost its medical equipment business.
The Wall Street Journal reported Friday that J&J, which makes medical devices as well as prescription drugs and consumer health products, is in talks to buy the company, possibly for about $20 billion.
That would be far larger than the typical J&J acquisition, but well below the price of recent pharmaceutical megamergers.
"As a matter of policy, we don't comment on speculation," J&J spokesman Bill Price said.
Synthes representatives couldn't be reached late Friday.
Synthes is based in West Chester, Pa., but has its global headquarters in Switzerland and trades on the Swiss Exchange. Its shares rose 6 percent Friday in Swiss trading.
Like Johnson & Johnson, the company has had recent trouble with regulators. Last year, Synthes pleaded guilty to a felony and dozens of misdemeanor crimes over unauthorized testing of its bone cement on spinal surgery patients, even though the cement was approved only for use in the arm. Three patients died on the operating table.
Synthes Inc. and subsidiary Norian Corp. performed the tests from 2002 to 2004. The companies agreed to pay $23 million in fines.
Johnson & Johnson is under close Food and Drug Administration scrutiny over repeated product recalls. They have resulted in the year-long closure of a nonprescription medicine factory in Fort Washington, Pa., a Philadelphia suburb not far from West Chester.