FT Reports J&J-Smith & Nephew Talks Collapse

Smith & Nephew’s talks to combine with Johnson & Johnson’s DePuy Synthes orthopaedics business collapsed despite reported agreement on key financial terms, with leadership emerging as the sticking point. Smith & Nephew wanted its current CEO, Deepak Nath, to lead the combined company, while J&J favored former Smith & Nephew chief executive Namal Nawana, who now heads DePuy Synthes. The proposed deal reportedly valued J&J’s unit at up to $22 billion and would have given J&J shareholders a 50.1% stake; Smith & Nephew would have used roughly $10 billion in debt financing for a payment to J&J to bridge the companies’ valuations. J&J has said it now favors spinning off the orthopaedics unit.