(Bloomberg) — Johnson & Johnson, the world’s biggest maker of health-care products, is in talks to sell its Cordis unit, with Cardinal Health Inc. the leading suitor, people with knowledge of the matter said.
Cordis has also garnered interest from other potential bidders who may remain in the process, said the people, who asked not to be identified because the information is private. No agreement has been reached and the talks could still fall apart. Cordis may fetch as much as $2 billion in a sale, a person familiar with the situation said in August.
The unit, which makes products including catheters and guide wires, is part of J&J’s medical-device business, which is the New Brunswick, New Jersey-based company’s second-biggest unit behind its drugs division. The unit pioneered the market for drug-coated heart stents, but moved away from that business as competitors introduced rival products that were more effective and easier to implant. Last year, medical devices were the weakest performer of all three main divisions with a 3.4 percent decline in sales.
Cardinal Health, based in Dublin, Ohio, distributes drugs and also manufactures medical equipment including surgical supplies. The company had sales of $91.1 billion in fiscal 2014.
Spokesmen for J&J and Cardinal declined to comment.
J&J Chief Executive Officer Alex Gorsky has said that the company is open to divesting smaller business. Last year, J&J sold its Ortho-Clinical Diagnostics business, which makes tests for everything from high cholesterol to hormones, to Carlyle Group LP for about $4 billion.
The medical-device business has become more challenging as insurers and hospitals work harder to clamp down on costs. Stents are tiny mesh tubes used to prop open arteries after they’ve been cleared of fat clogging the flow of blood.
To contact the reporters on this story: Cynthia Koons in New York at ckoons@bloomberg.net; Ed Hammond in New York at ehammond12@bloomberg.net
To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net Drew Armstrong, Elizabeth Wollman
