As many Texas residents know, a large number of mergers and acquisitions have been in the news lately. However, this week, newspapers report on a massive union between two companies.
Specifically, Johnson & Johnson has purchased Synthes for $19.7 billion, which serves as the company's largest acquisition in its 126-year history. Synthes is a device company that sells plates, screws, bone grafts and other similar products, which treat trauma victims.
With this deal, J&J is the world's biggest health-care products company. It entered into buyback agreements for about $12.9 billion in shares with Goldman Sachs Group and JPMorgan Chase & Co. The deal was an effort to help pay for the cash-and-stock acquisition.
According to J&J, the repurchases will help J&J fund the transaction in an effort to enhance shareholder value. Furthermore, this deal will position the company above all of the rest.
J&J rose 2.4 percent to $64.56 this morning in New York Stock Exchange trading. Before yesterday, the shares had lost 4.6 percent in the past year.
In 2013, the first full year of joint operations, the acquisition is projected to add 10 to 15 cents a share to earnings.
Synthes holders will get approximately 55.65 Swiss francs and about 1.72 shares of J&J stock for each share they own.
Mergers and acquisitions are not always easy. They often involve a lot of details and costs. For example, J&J has undoubtedly dealt with various expenditures, including restructuring and integration expenses. To ensure a smooth transition, the company will probably work with a solid merger and acquisition specialist.
Source: NJ.com, "J&J's $19.7 billion purchase of Synthes gets U.S. approval," June 13, 2012