Can Synthes Turn Johnson & Johnson Around?

Johnson & Johnson (JNJ) has been struggling recently, but it may have the key to its recovery. The company recently completedits potentially profitable acquisition of Synthes. This may help the company turn around in the long run, but I think it will have a fairly neutral effect on the stock for the moment.

Johnson & Johnson recently purchased Synthes — a leader in the manufacturing of medical technology — for $19.7 billion in cash and stock. Synthes has been integrated with Johnson & Johnson’s DePuy franchise in order to boost that area of the company’s functioning. Together, the two companies will go by the name of DePuy Synthes. Alex Gorsky claims, “The completion of the Synthes acquisition creates the world’s most innovative and comprehensive orthopedics business and reflects our long-standing strategy of leadership within attractive healthcare markets.” The company believes it will be attractive because it should be profitable.

This may be a good move for the company. The integration may introduce new innovations to the field of orthopedics that will mark Johnson & Johnson as a leader in the industry. This is a good market to try to get involved in right now, furthermore, as it is one of the fastest growing markets in the industry. The integration will also allow Johnson & Johnson to become a leader in technological advancements in the neurological sphere.

This merger should also help the involved companies remain up-to-date with various advances in the medical field.To continue reading, click here.