Wednesday 20 June 2018

Boston Scientific receives Stryker takeover approach

Mike Mahoney, the US-based CEO of Boston Scientific
Mike Mahoney, the US-based CEO of Boston Scientific
Donal O'Donovan

Donal O'Donovan

Medical device maker Stryker Corp has made a takeover approach to Boston Scientific Corp, the 'Wall Street Journal' has reported.

It is unclear whether Boston Scientific is receptive to the approach, the paper reported.

Both companies have significant operations in Ireland. Stryker employs around 2,000 staff here at four sites, three in Cork and one in Limerick.

Boston Scientific, headed by US-based CEO Mike Mahoney, employs more than 3,000 in Ireland, which is home to three of its five European plants, in Galway, Cork and Clonmel, Co Tipperary.

Shares of Boston Scientific, which had market value of $44bn (€37.3bn) as of last Friday's market close, surged 9pc, while Stryker's were down 3pc on the bid news. Stryker had a market value of nearly $67bn (€57bn) as of Friday's close.

"As a matter of company policy, we do not comment on potential M&A," Stryker said.

Boston Scientific did not immediately respond to requests for comment.

Boston Scientific lags behind Medtronic and Edwards Lifesciences Corp in the heart valves market and has pinned its hopes on its updated Lotus device, set for launch in 2019, following the withdrawal of an earlier version from Europe last year.

A deal between Stryker and Boston Scientific would be the latest in a series of large acquisitions in the industry, which has been consolidating to win market share and to package sales to hospitals, doctors and health clinics.

Boston Scientific is best-known for its heart devices such as pacemakers and stents. Stryker manufactures orthopedic products such as artificial hips and knees.

Combining the companies would let them wring costs out of efforts to sell products to a similar set of customers, and would give a combined firm more market power.

Many of their largest competitors have already executed large takeovers in recent years.

Mergers by large health insurers have increased pressure on hospitals to lower expenses amid an ongoing debate about the cost of care, especially in the US.

Abbott Laboratories last year bought St Jude Medical, which makes heart devices, for about $25bn (€21bn), and then months later completed a takeover of medical testing and diagnostics supplier Alere for about $5bn (€4.2bn). Medtronic bought Covidien, which makes surgical products, for about $46bn (€39bn) in 2015.

(Additional reporting by Bloomberg and Reuters)

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business