Rumors that Stryker Corporation plans to make a £13 billion ($20.21 billion) offer to acquire Smith & Nephew plc. sent the British multinational medical equipment manufacturing company’s share price up by nearly 10% on Wednesday.
The Kalamazoo-based surgical implant maker is considering offering a 30% premium to Smith & Nephew’s share price, which reached £11.80 ($18.35) on Wednesday, valuing the company at approximately £10.6 billion ($16.48 billion).
In May this year, Kevin Lobo, President & Chief Executive Officer of Stryker, said his company was considering making a move to acquire Smith & Nephew, but did not go as far as making a bid. His announcement and lack of follow-through put Stryker in a “cooling-off” period that meant it could not approach Smith & Nephew until November.
According to US media reports, Stryker is not motivated by the UK’s lower corporate tax, even though its reluctance to proceed in May coincided with a clampdown by the US Treasury on tax-inversion strategies.
People familiar with the matter say Stryker would not move its headquarters to London where corporate tax is 15 percentage points lower than in the US.
If the acquisition goes ahead, the new entity would be a medical devices super-giant.
About Smith & Nephew plc
Smith & Nephew, founded in 1856, is the world’s largest maker of arthroscopy products, i.e. devices that examine the interior of joints. It is the second-biggest producer of advanced wound management products, and the third-largest of trauma and clinical therapy products. The company is also a major producer of orthopedic reconstruction products.
Smith & Nephew employs about 11,000 workers and operates in more than 90 countries.
About Stryker Corporation
Stryker Corporation, founded in 1941, is a leading producer of implants used in joint replacement and trauma surgeries, endoscopic and communications systems, surgical equipment and surgical navigation systems, patient handling and emergency medical equipment, as well as several other medical devices.
In the US, Stryker products are mainly sold directly to hospitals, doctors and other healthcare facilities. Abroad, it sells through company-owned sales subsidiaries and branches as well as third-party distributors and dealers.
The company employs about 22,000 workers.