US healthcare major Johnson & Johnson today won European Union approval for its acquisition of Swiss medical device maker Synthes Inc, for about $21.3 billion, in a move that could prop up its orthopedics practice.
The deal is J&J's largest acquisition. The company, however, had to agree to sell its DePuy Orthopaedics Trauma business to allay antitrust concerns of the European Union.
J&J and Synthes Inc, a premier global manufacturer of orthopaedic devices, had on 24 April last year entered into a definitive agreement whereby Johnson & Johnson will acquire Synthes for CHF159 per share, or $21.3 billion.
J&J had earlier cherished hopes of combining Synthes and DePuy to form the largest business within the medical devices and diagnostics segment of the company.
Under the terms of the agreement, each share of Synthes common stock, subject to certain conditions, will be exchanged for CHF55.65 in cash and CHF103.35 in Johnson & Johnson common stock. The transaction has an estimated net acquisition cost of $19.3 billion as of the close of business on 26 April 2011, based on Synthes approximately 119.5 million fully diluted shares outstanding and approximately $2 billion in cash on hand as of signing.
The European Commission said in a statement that the merged group would continue to face competition from several strong rivals and that customers would still have sufficient alternative suppliers.