Smith+Nephew held talks with Johnson & Johnson’s hip-and-knee replacement unit DePuy Synthes aimed at a potential combination with its orthopedics unit.
The company said in a third quarter financial release that these talks ultimately collapsed: “We [the company’s board] approached Johnson & Johnson earlier in the year, and subsequently discussions did take place, but those conversations have now ended,” Smith+Nephew confirmed in a statement Wednesday.
Media reporting about a potential deal between the two began surfacing last week.
Smith+Nephew has seen revenue struggles as its orthopedics division has faced slowing growth, impacting its overall business trajectory. The company logged sales up 2.3% in reported growth for the business, reaching $590 million for the third quarter.
Knee implants, the largest segment for orthopedics at around half of all sales, was down 2.6%, with much of that loss stemming from the U.S. market.
Smith+Nephew has started a “12-Point Plan” and said in its Q3 update that while it is making “considerable progress strengthening” the unit, it “will continue to actively explore the full range of strategic options for the business as we develop the best outcome for our shareholders, patients, customers and colleagues.”
For its part, J&J revealed last October that it was seeking to separate its orthopedics business, with the goal to transform it into a standalone company. At the time, J&J predicted the separation would occur within 18 to 24 months.
Bloomberg reported in September that J&J was nearing a $20 billion deal to sell DePuy Synthes to the private equity firm Apollo Equity Management.
The company did not confirm or deny the deal to Fierce. No deal has yet been made formal.
In 2024, J&J’s orthopedics business generated sales of $9.2 billion, accounting for more than 10% of the company’s revenue and 29% of the sales in its medtech sector. Sales barely moved up in 2025, however, with the unit bringing in $9.3 billion last year.
The orthopedics unit produces implants for hip, knee and shoulder replacement, along with surgical instruments and other products. Both Smith+Nephew and J&J compete with Stryker and Zimmer Biomet in this space.