Johnson & Johnson plans to separate orthopaedics unit DePuy Synthes

Johnson & Johnson (NYSE: JNJ) announced plans to separate its orthopaedics business as a standalone company operating under the DePuy Synthes name. The healthcare giant expects to complete the transaction within 18 to 24 months, subject to regulatory approvals and board approval.

The orthopaedics business generated approximately $9.2 billion in sales for fiscal year 2024 and serves about seven million patients annually. Following separation, DePuy Synthes would operate in a global market opportunity valued at more than $50 billion.

Johnson & Johnson appointed Namal Nawana as worldwide president of DePuy Synthes, effective immediately. Nawana previously served as executive chairman and founder of Sapphiros and as chief executive officer of Smith & Nephew. He also held the role of worldwide president of Johnson & Johnson's DePuy Synthes Spine business earlier in his career.

"This transaction enables Johnson & Johnson to further strengthen its focus and investment toward higher-growth areas where we can meaningfully extend and improve patient lives," said Joaquin Duato, chairman and chief executive officer of Johnson & Johnson.

The separation aims to allow Johnson & Johnson to focus on six growth areas across its Innovative Medicine and MedTech segments: oncology, immunology, neuroscience, cardiovascular, surgery and vision. The company expects the separation to increase its top-line growth and operating margins.

Johnson & Johnson is exploring multiple paths to complete the separation. Citi and Goldman Sachs serve as financial advisors, while Freshfields acts as legal counsel for the transaction.

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