Big old-school conglomerates are selling. First it was Dow Chemical, Merck and General Electric putting up units for sale. Now its Johnson & Johnson, the world’s biggest maker of health-care products, that is seeking a buyer for its medical devices business.
The division, named Cordis, includes simple products like catheters and stents, which analysts are estimating could fetch as much as $2 billion. Cordis had earlier pioneered the market for drug-coated stents for the heart.
On the news, the stock moved slightly higher in midday trading.
The unit, once a market leader, lost share to rivals in the $5 billion stents market and Johnson & Johnson decided three years ago to focus on other products in faster-growing categories.
Earlier this year the company sold Ortho-Clinical Diagnostics business to Carlyle Group for $4 billion as it attempts to shed lower-growth businesses and reduce costs by $1 billion.
Conglomerates that were once thought of as empires often turned out difficult to manage, and shareholders wanted better results by focussing on core businesses.
This deal would add to a bunch of M&A activity in the healthcare sector, particularly in medical-device companies. One of the bigger deals in the works is Medtronic’s $43 billion offer for Covidien Plc, which comes after it bought Italy’s NGC Medical for $350 million.
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