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Synthes Confirmed Johnson & Johnson Bargain to Purchase its Company

Synthes Inc. has confirmed Tuesday that it is in negotiations with Johnson & Johnson for its possible takeover. The alleged agreement is rumored worth nearly $20 billion, probably the largest deal J&J will commit in its history.

However, Synthes refuses to provide additional information until a precise agreement has been reached or negotiations have been closed with the American pharmaceutical and medical devices manufacturer, the company said on Monday.

Johnson & Johnson, which was involved in a legal suit in 2010, is still gaining confidence after more than 50 of its products were pulled off in the market. Because of that, some believes J&J might face some problems on how they can prove to some investors that they are already capable of managing big acquisitions.

There have been several months of speculations regarding J&J’s talks with British device manufacturer, Smith & Nephew. On Monday, Smith & Nephew’s stock dropped 3 percent in London trading, the company’s largest one-day decline for three months.

Speculations will end once the $20 billion agreement pursues between J&J and Synthes, the largest manufacturer of devices used to treat trauma, as well as bone fractures.

Synthes is expected to provide New Jersey-based Johnson & Johnson a line of surgical power tools, hip scews and equipment used to treat soft-tisse and spinal injuries. This will certainly boost the American company’s shares in the trauma care market.

Johnson & Johnson refused to comment about the negotiations. J&J’s stock stock, which has dropped 7 percent in the past 12 months, fell 10 cents to $60.46 in New York.

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