Johnson & Johnson/Synthes - Top 10 medical device deals of 2011

Companies: J&J/Synthes
Value: $21.3 billion

Scoop: In April, Johnson & Johnson ($JNJ) announced the biggest deal of the year with its intention to buy Switzerland's Synthes for $21.3 billion in cash and stock. As a result of the deal, Synthes and the DePuy Companies will become the largest businesses within the medical devices and diagnostics segment of J&J. The deal is expected to close during the first half of this year.

As The Wall Street Journal noted, the Synthes deal is the biggest purchase in the history of J&J, which is looking to become the leader in the $5.5 billion market for trauma devices.

"Usually, with bigger acquisitions investors are focused primarily on cost cutting" that could raise short-term profits, said Morningstar's Damien Conover, as quoted by Reuters. He saw the deal as potentially boosting J&J's annual earnings growth to 4.5% or higher over the next 5 years.

The announcement of the deal helped pump up J&J's stock, Pharmalot observed, which had been repeatedly hit over controversy surrounding recalls of a number of products.

Synthes shareholders have approved the acquisition; however, after opening its investigation into whether competition will be adversely affected by the proposed deal, the European Commission has announced that it has extended its review to April 2 from March 19.

Johnson & Johnson/Synthes - Top 10 medical device deals of 2011
Read more on