Medtronic mulls takeover of London-based Smith & Nephew
05 Jun 2014
US medical device maker Medtronic Inc is weighing a deal to acquire London-based Smith & Nephew Plc in order to lower its taxes by moving its base to the UK, Bloomberg yesterday reported, citing sources familiar with the matter.
Medtronic is the second company mentioned in the media as a potential suitor for Smith & Nephew after the Financial Times last week reported that Stryker Corp is running an eye on Europe's biggest maker of artificial hips and knees.
At the request of the UK Takeover Panel, Stryker, a Fortune 500 medical technologies firm based in Michigan, said that it did not intend to make an offer for Smith and Nephew. (See: Stryker denies Smith & Nephew bid)
The reports followed a wave of M&A deals and rumours across the global healthcare and pharmaceutical sectors that had given the sentiment a lift in recent months.
Among these were Biomet's $13.35-billion purchase of Zimmer, a multi-billion pound asset swap between GlaxoSmithKline and Novartis (Novartis AG, GSK in $23-bn assets swap deal ) , and, most recently, Pfizer's failed near-£70 billion takeover of AstraZeneca (AstraZeneca rejects Pfizer's third takeover offer ).
Smith & Nephew had recently been frequently reported by analysts as a takeover target.
In 2010 Johnson & Johnson was reported to be considering making a fresh takeover bid for the FTSE 100 company after the board of Smith & Nephew had earlier rejected the US healthcare giant's informal takeover offer of 750 pence-a-share, or £7 billion. (See: Johnson & Johnson mulls fresh assault on Smith & Nephew: report)
Smith & Nephew, which started off as a dispensing chemist in 1856, is the world's largest maker of arthroscopy products, second-largest maker of advanced wound management products, third-largest producer of trauma and clinical therapy products and fourth-largest producer of orthopedic reconstruction products.
The Minnesota-based company has operations in 32 countries and sells over 1,000 products in over 90 countries.
With a market cap of £9.5 billion ($15.90 billion), the London-based company has a presence in more than 90 countries and generated sales of $4.3 billion in 2013.
Medtronic, the world's largest independent medical products maker which develops and manufactures devices and therapies to treat more than 30 chronic diseases, including heart failure, Parkinson's disease, urinary incontinence, down-syndrome, obesity, chronic pain, spinal disorders, and diabetes.
The 65 year-old company operates in more than 140 countries, employs over 46,000 people and posted net income of $3.5 billion in 2013 on revenues of $16.6 billion.
