Smith & Nephew merger talks with J&J orthopaedics unit collapse over CEO role, FT reports

Smith & Nephew, J&J Merger Talks Fail After CEO Dispute, FT Reports

Merger Negotiations and Breakdown

Background of the Merger Talks

Oct 23 (Reuters) - Smith & Nephew's talks with Johnson & Johnson to combine with the US group’s orthopaedics division fell apart after the London-listed group refused to agree to its former CEO leading the merged business, the Financial Times reported on Friday, citing people familiar with the matter.

Advanced Negotiations and Disagreement

Talks about a merger between Smith & Nephew and the J&J unit were at an advanced stage, with both companies aligned on the main financial terms and structure of a transaction, but collapsed at the last minute after disagreement over who would run the enlarged company, the report said.

Key Figures and Leadership Dispute

Smith & Nephew's former CEO Namal Nawana left in 2019 after 18 months in the role because the UK medical devices company could not meet his pay demands, the FT report said.

Smith & Nephew refused the deal, saying it would only agree if its own boss Deepak Nath remained CEO, the report added.

Responses and Market Impact

A Smith & Nephew spokesperson declined to comment on the report. J&J could not be immediately reached outside of business hours.

Deal Valuation and Market Capitalisation

The proposed deal would have valued J&J's hip and knee replacement unit at as much as $22 billion, almost double Smith & Nephew’s £9.4 billion ($12.58 billion) market capitalisation, the report said.

Future of J&J’s Orthopaedics Business

J&J announced plans to separate its orthopaedics business into a standalone company named DePuy Synthes in October 2025. The unit, which was reportedly seeking a $20 billion price tag, has since drawn private equity interest, but no deal has materialised yet. 

Additional Information

($1 = 0.7470 pounds)

(Reporting by Yamini Kalia in Bengaluru; Editing by Mrigank Dhaniwala)