Johnson & Johnson News

U.S.-Swiss medical device maker Synthes Inc. confirmed Monday it is in talks to be bought out by health giant Johnson & Johnson, in a deal that could make its chairman Switzerland's richest man. Synthes makes surgical instruments, implants and materials for repairing bone and soft tissue. Johnson & Johnson, which is under close Food and Drug Administration scrutiny over repeated product recalls, hopes to boost its medical equipment business. J&J owns DePuy, manufacturers of the ASR XL prosthetic hip device that was recalled in the fall of 2010. Johnson & Johnson's repeated product recalls have resulted in the year-long closure of a nonprescription medicine factory in Fort Washington, Pennsylvania, a Philadelphia suburb.

Shares of Synthes jumped Friday after the Wall Street Journal reported that J&J is in talks to buy the company, possibly for about $20 billion, which is far bigger than a typical J&J acquisition, but well below the price of recent pharmaceutical megamergers. Shares of Johnson & Johnson, the world's largest health-care company, were trading slightly higher in early trading in New York.

Synthes is based in West Chester, Pennsylvania, but has its global headquarters in Solothurn, Switzerland.
Like Johnson & Johnson, Synthes has had recent trouble with regulators. In 2010, 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 and subsidiary Norian Corp. performed the tests from 2002 to 2004. The companies agreed to pay $23 million in fines.