Is Johnson & Johnson eyeing Edwards, St. Jude?

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Johnson & Johnson, already the world’s largest health products maker, could have its eye on Edwards Lifesciences and St. Jude Medical as potential acquisitions, analysts say.

MassDevice On Call

MASSDEVICE ON CALL —Johnson & Johnson (NYSE:JNJ) could be setting its sights on Edwards Lifesciences (NYSE:EW)and St. Jude Medical (NYSE:STJ) as additions to its ailing cardiovascular portfolio – the only segment of its medical device business to shrink over the last 5 years.

New CEO Alex Gorsky told Bloomberg that he wants to grow J&J’s devices business via acquisition last week. An Edwards buyout would give it half of the global market for heart valves, “which analysts say will boost earnings more than any cardiovascular device maker in the next 3 years,” according to the news service.

And acquiring St. Jude would add the med-tech industry’s highest-margin business to J&J’s portfolio, according to Bloomberg.

“If J&J is interested in remaining relevant in cardiology, it’s important for them to create another beachhead,” Manning & Napier analyst Jeff McCormack told the news service. “[S]ize is going to matter. So it might be a good time for a company like J&J to begin to identify who they envision to be winners.”

Edwards and St. Jude declined to comment on whether the world’s largest healthcare company has approached them, or if they’d be receptive to an offer.

 

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