Biomet, Inc., offered $280 million to Johnson & Johnson for the trauma segment of J&J's DePuy Orthopaedics unit, which will help satisfy European Union antitrust concerns about J&J's acquisition of Synthes, Inc.
“DePuy Orthopaedics, Inc. has received a binding offer from Biomet, a leading, diversified orthopaedic company, by which Biomet will acquire the DePuy Orthopaedics worldwide trauma business," J&J spokesman Bill Price said via email. "The offer includes the purchase of DePuy’s internal and external fixation products used in the treatment of bone fractures as well as the organization supporting this business. The sale is subject to regulatory approvals and is expected to close in the second quarter of 2012.
“We believe this divestiture will satisfy all regulatory concerns relating to the pending purchase of Synthes by Johnson & Johnson, but we will not know with certainty until the regulatory processes in the EU and U.S. are completed. We continue to make progress in our work with antitrust authorities on the Synthes transaction and look forward to closing in the first half of this year.”
J&J, which is based in New Brunswick, N.J., and has multiple divisions in the Philadelphia region, agreed in April 2011 to buy Synthes for $21.3 billion. Synthes is based in Switzerland, but has a U.S. headquarters and other facilities in Chester County.
The European antitrust issue is thought to be the last hurdle before the deal closes. That might be resolved by April 26, when J&J holds its annual meeting.
Biomet is based in Warsaw, Ind.
That company recently avoided prosecution by entering into a "Deferred Prosecution Agreement" with the Justice Department and a "Consent to Final Judgment" the Securities and Exchange Commission in exchange for $22,855,731 in fines and penalties. The misdeeds were violations were of the Foreign Corrupt Practices Act.
Synthes' trauma unit is considered the strength of the company and trauma products are less vulnerable to weaknesses in the economy.
If someone suffers broken bones in an accident and needs plates or screws or nails, he or she is likely to have surgery involving those products. Conversely, more elective surgery, such as a hip or knee replacement, is sometimes put off by patients worried about losing a job and health insurance.