Johnson & Johnson is moving forward with a potential sale of its DePuy Synthes orthopedics unit, a business that has been earmarked for divestiture for several years. Bloomberg estimates the transaction could be worth more than $20 billion, with a valuation that could reach $28 billion when debt is included.
DePuy Synthes, acquired by J&J in 1998, is a global leader in joint reconstruction, trauma, spinal surgery and sports‑medicine devices. In 2025 the unit generated $9.3 billion in sales, up from $9.2 billion in 2024 and $8.94 billion in 2023, reflecting steady demand for hip and knee replacement products and a growing portfolio of shoulder implants and surgical tools.
The sale is part of J&J’s broader strategy to sharpen focus on its high‑growth pharmaceutical and advanced medical‑device segments. While the company had previously signaled a tax‑free spin‑off, it is now exploring a sale that could deliver immediate cash and unlock value for shareholders. Interest is reportedly coming from private‑equity sponsors and rival medical‑device firms, and the transaction would be among the largest sponsor‑backed healthcare buyouts in recent memory.
J&J’s Q4 2025 earnings beat expectations, reporting adjusted earnings of $2.46 per share versus a consensus of $2.44. The beat was driven by disciplined cost management and a favorable mix shift toward higher‑margin pharmaceutical products, offsetting modest pressure in the legacy med‑tech segment. The company also projected 2026 sales of $99.5 billion to $100.5 billion, above consensus estimates of $98.9 billion, underscoring confidence in its growth trajectory.
Investors responded favorably to the announcement, reflecting confidence that divesting a mature orthopedics business will allow J&J to concentrate resources on faster‑growing areas and potentially enhance shareholder value. The move also aligns with the company’s recent earnings performance and forward guidance, reinforcing its strategic narrative.
The potential sale of DePuy Synthes could reshape J&J’s portfolio, positioning the company to capitalize on high‑growth opportunities in pharmaceuticals and advanced medical devices while reducing exposure to a slower‑growing, litigation‑heavy orthopedics segment.
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