Smith & Nephew orthopaedics deal talks with J&J reportedly fail over CEO choice
SNN•Smith & Nephew’s talks to merge with Johnson & Johnson’s orthopaedics division collapsed over who would lead the combined business. The talks had reportedly reached advanced stages, with Smith & Nephew valuing J&J’s hip and knee replacement unit at up to $22 billion.
1. Leadership dispute
Smith & Nephew held talks to merge with Johnson & Johnson’s orthopaedics division, but discussions collapsed over who would lead the combined business. A person familiar with the matter said J&J was not prepared to pursue a deal with Smith & Nephew CEO Deepak Nath leading the group; J&J’s preferred candidate was former Smith & Nephew CEO Namal Nawana, who now heads J&J’s orthopaedics division.
2. Deal terms and valuation
Smith & Nephew approached J&J earlier this year with an offer valuing its hip and knee replacement unit at up to $22 billion, the person said. The Financial Times reported that talks had reached an advanced stage, the sides were aligned on main financial terms and J&J shareholders would have owned 50.1% of the combined company.
3. J&J plans separation
J&J announced plans to separate its orthopaedics business into a standalone company named DePuy Synthes and last week said it was leaning toward a spinoff, with separation targeted for mid-2027. The unit had reportedly sought a $20 billion price tag, and private equity firms had expressed interest, but no deal had materialised.
