Updated version 3 - Correction - Sources say Smith & Nephew’s negotiations with Johnson & Johnson Orthopedics broke down due to issues over the CEO candidate.
路透社2026/10/23 17:01Republished according to insider information
Sabrina Valle
Reuters New York, October 23 - An insider told Reuters on Friday that Smith & Nephew (Smith & Nephew, SN.L) had negotiated a merger with the orthopedics unit (JNJ.N) of Johnson & Johnson, but talks eventually fell apart due to disagreements over who would run the merged group.
Regarding an earlier Financial Times report, UK medical device company Smith & Nephew and US group Johnson & Johnson both declined to comment. The report stated that merger talks were at an advanced stage, with both sides agreeing on major financial terms and structure.
According to the Financial Times, negotiations broke down at the last moment because Smith & Nephew refused to agree to have its former CEO, Namal Nawana, lead the new merged company.
John West, Global Head of Analysis at Mergermarket, said: “This merger could have created a rich portfolio covering knee and hip implants, while filling product gaps for both parties in the musculoskeletal field.”
The Financial Times reported that Smith & Nephew made an acquisition offer to Johnson & Johnson earlier this year, valuing the US company’s hip and knee replacement business unit at up to $22 billion, nearly double Smith & Nephew’s £9.4 billion ($12.58 billion) market cap.
A year ago, Johnson & Johnson announced (link) it planned to spin off its orthopedics business as an independent company called DePuy Synthes. The division was reportedly seeking a $20 billion valuation (link) and attracted private equity interest (link), but no deal has been reached so far.
Last week, Johnson & Johnson stated (link) that it prefers to spin off the business, targeting mid-2027 as the split-off date.
https://www.reuters.com/graphics/JOHNSONANDJOHNSON-DIVESTITURE/moparoennva/chart.png
Management developments and terms
Nawana served as CEO of Smith & Nephew for 18 months, stepping down in 2019 and now heads Johnson & Johnson’s orthopedics division.
According to the Financial Times, he was originally selected by the US pharmaceutical company to lead the combined group, but Smith & Nephew insisted that current CEO Deepak Nath remain in charge, causing Johnson & Johnson to lose interest.
The Financial Times reported that, before talks were terminated a few weeks ago, both sides had planned to announce the deal in mid-October, adding that if the deal was completed, Johnson & Johnson shareholders would hold 50.1% of the merged company.
Smith & Nephew has been facing sluggish growth and, after three years of cost-cutting and sales initiatives, is hoping new products will boost revenue.
John West at Mergermarket said it would not be surprising if the parties eventually return to the negotiating table.
($1 = £0.7470)
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