Johnson & Johnson (J&J) has announced it has entered a definitive agreement to buy medical device maker Synthes for $21.3bn - the biggest purchase in the company's history.
The deal will see J&J incorporate Swiss-based Synthes, a company that specialises in the manufacture of instruments, implants and biomaterials in the area of orthopaedic trauma, into its DePuy unit that focuses on healthcare solutions in orthopaedics, spinal care, sports medicine and neurosciences.
Each share of Synthes common stock will be exchanged for 55.65 Swiss francs in cash and 103.35 Swiss francs in J&J common stock.
"Orthopaedics is a large and growing $37bn global market and represents an important growth driver for Johnson & Johnson," said Bill Weldon, chairman and CEO, J&J. "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."
Michel Orsinger, president and CEO of Synthes, also commented on the deal: "The combination presents a significant opportunity to jointly bring our products, services and educational offerings to the next level."!
In a statement, J&J said the deal would allow the companies access to increased product development capabilities and strong pipelines, as well as a greater expertise and a wider global reach, especially in emerging markets.
According to J&J, these developments will enable the company to address significant trends in orthopaedics, including an ageing population, increasing obesity and its impact on joints, and a movement towards earlier intervention.
The merger, which will require the approval of Synthes' stockholders, is expected to be completed during the first half of 2012.
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