Synthes investors back J&J buyout

AP News
Posted: Dec 15, 2011 12:05 PM
Synthes investors back J&J buyout

Swiss orthopedics maker Synthes says its investors overwhelmingly voted to accept a $21.3 billion acquisition offer from U.S. health care conglomerate Johnson & Johnson.

The vote was the latest step in J&J's effort to acquire the medical device maker which, if successful, would be J&J's largest purchase ever.

The deal still needs to be cleared by regulators in the U.S. and Europe but is expected to close by June.

Synthes said in a statement about 75 percent of shares entitled to vote were represented in Thursday's action. The company did not report the final vote count.

J&J said in a statement: "We are pleased with the result and continue to make progress on all aspects of the merger process required to complete the transaction."

The European Union Commission has until April 2 to complete its review of the transaction, according to J&J.

Synthes is the top player in devices for repairing traumatic injuries and No. 2 in spine repair products, and is highly profitable. A successful buyout would double J&J's market position in spine repair products and add roughly 5 percent to the company's 2012 earnings per share, according to analysts.

The sale of Synthes could also make multibillionaire chairman Dr. Hansjorg Wyss the richest man in Switzerland. He owns 40 percent of the company, and his family's trust owns an additional 8 percent, according to Synthes' 2010 annual report.

Synthes' U.S. offices are located in West Chester, Pa., but the company's global headquarters is in Solothurn, Switzerland.

For Johnson & Johnson, based in New Brunswick, N.J., buying Synthes would help offset declines in sales from some of its biggest over-the-counter medications, including children's Tylenol. The company's repeated product recalls have resulted in the year-long closure of a key factory in Fort Washington, Pa. The company is under close Food and Drug Administration scrutiny.

Johnson & Johnson shares rose 62 cents to $63.80 in midday trading Thursday.