UPDATE: June 13, 2018: This story has been updated with information from a Stryker SEC filing disputing any discussions with Boston Scientific.
- The latest potential healthcare megamerger could be in medical technology, with a bid by orthopedic device manufacturer Stryker for Boston Scientific, according to a Wall Street Journal report on June 11.
- On June 13, though, Stryker in a regulatory filing said there were no discussions about a potential acquisition. Boston Scientific declined earlier in the week to respond to reports of a takeover bid.
- Any deal would combine two major devicemakers into a $110 billion powerhouse. Kalamazoo, Michigan-based Stryker has expertise in orthopedics, neurotechnology and spinal procedures while Boston Scientific’s strengths are in cardiovascular and rhythm management.
Consolidation in the device world could have ramifications for health systems and providers, and in fact may be in part a response to M&A among those companies. Hospitals looking for competitive prices on advanced technologies and other supplies will have less negotiating leverage with fewer companies at the table.
Shares of Stryker fell more than 4% Monday on news of the takeover bid, while Boston Scientific’s climbed close to 8%. Trading was later halted. Stryker posted a 10% boost in net sales for 2017 to $12.4 billion. Boston Scientific reported roughly $9 billion in sales last year, a jump of about 8%.
No sector of the healthcare industry is immune to consolidation as health systems, health IT vendors, pharmaceutical companies and medical device firms seek to boost their brand, expand products and services and increase scalability under pressure from payers.
The medical device market experienced strong growth in 2017, along with several big-ticket deals, according to GlobalData Healthcare. Among them were Johnson & Johnson’s $4 billion buyout of Abbott Medical Optics and Becton Dickinson’s acquisition of C.R. Bard for $24 billion. Other recent shakeups in the device industry include Abbott’s $25 billion purchase of St. Jude Medical and Medtronic’s $49.9 billion deal with Irish devicemaker Covidien. Medtronic turned around a year later and snapped up HeartWare for $1.1 billion.