Zimmer Buys Biomet for USD 13.35 Billion

Orthopedic device maker Zimmer (Warsaw, IN, USA) is buying privately-held Biomet (Warsaw, IN, USA) in a move aimed at expanding its product offerings and services.

The merger of Zimmer and Biomet will position the combined company as a leader in the USD 45 billion musculoskeletal industry, and is aligned with Zimmer’s strategic plans. The combination will enhance enterprise diversification with broader franchises in the Knee, Hip, Surgical, Spine, and Dental categories, as well as in the faster-growing Sports Medicine, Extremities, and Trauma categories. The combined company’s broader portfolio is also expected to help its sales force to be more effective in all geographies, increasing its ability to help physicians and healthcare systems improve patient outcomes in a cost-effective manner.

The deal elevates Zimmer from fourth position to that of the second largest company (by revenue) in the world for artificial knees, hips, and other orthopedic implants, just behind Johnson & Johnson (New Brunswick, NJ, USA). The combined company will continue to be headquartered in tiny Warsaw (IN, USA), as is DePuy Orthopedics, a Johnson & Johnson company. This has led the town, with a population of just 14,000, to call itself the “Orthopedic Capital of the World”.

“This is a milestone combination that brings together two highly complementary organizations and is consistent with our mission to lead the industry in delivering value to healthcare providers, their patients and stockholders,” said David Dvorak, president and CEO of Zimmer. “We believe that current demographic and macroeconomic trends affecting the healthcare industry will reward companies that successfully partner with other key stakeholders to improve patient care in a cost-effective manner.”

“The combination with Zimmer will prepare us to compete as a stronger entity in the medical device industry of the future,” said Jeffrey R. Binder, president and CEO of Biomet. “Our combined scale will extend the reach and influence with which we pursue our common passion: delivering products and services that benefit our customers and the patients we ultimately serve.”

The Zimmer-Biomet merger is the largest in the medical-devices industry since Johnson & Johnson purchased Synthes for USD 21.3 billion in 2012, and highlights the desire of device companies to cut costs and become more efficient in the face of pricing pressure from hospitals and lower overall surgical procedure volumes resulting from consumer uncertainty about the economy.

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