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Medical device maker Stryker makes takeover approach to Boston Sci: WSJ


By Bill Berkrot

(Reuters) - Medical Corp has made a takeover approach to rival Corp, reported https://on Monday, a combination that would give a strong position in

Shares of both companies were halted in early afternoon trading.

A deal would create a combined company with a market value of more than $110 billion and a wide breadth of product offerings from cardiology and orthopedics to surgical supplies and at a time when leaders in the sector feel the need to get bigger to be able to offer hospitals and other customers a one-stop shopping experience.

It is not clear whether is open to a potential acquisition by Stryker, reported, citing people familiar with the matter.

Representatives of both and declined to comment on the report. But the two have done business before. Stryker bought Boston Scientific's neurovascular unit in 2010 for $1.5 billion.

Shares of Boston Scientific, which has a market value of about $44 billion, jumped 10 percent, while Stryker shares were off more than 3 percent.

Boston Scientific shares were up $3.04 at $34.99 while Stryker shares were down $6.23 at $172.72 when trading was halted.

"If this is accurate, it would create a roughly $24 billion company, which would place it behind only and in total device revenue," said in a research note.

He added that the combination would be one of broader scale with limited product overlap.

If the deal were to happen, Stryker would gain Boston Scientific's line of heart devices, such as stents to prop open clogged arteries, defibrillators to correct dangerously out of whack heart rhythms, and its device to prevent from traveling around the heart. All of those devices reduce the risk of

The company has numerous other product lines that could enhance Stryker's offerings, including in and products.

Boston Scientific lags behind and Plc in the fast-growing heart valve replacement market. It has pinned its hopes on an improved version of its Lotus replacement valve, set for launch in 2019 after withdrawal of an from last year.

Stryker already has a leading position in orthopedics, such as devices and hip and knee replacements, as well as

There has been a slow stream of large consolidation deals in the medical device sector in recent years.

"For all the companies, in order to remain and to become a more valuable supplier to their hospital customers, it is really more and more important to be able to offer ... a much more comprehensive product portfolio that sells into all different parts of the hospital under different specialties," Morningstar said.

Early last year, completed a $25 billion purchase of St Jude Medical, acquiring its chronic business and significantly enhancing its cardiovascular device offerings, such as to treat that can significantly raise the risk.

In one of the largest deals in the sector, in early 2015 completed an acquisition of for about $43 billion. The tax inversion deal enabled formerly Minneapolis-based Medtronic to take advantage of much lower corporate tax rates by moving its headquarters to and also gain a large portfolio of surgical and

In 2014, Zimmer merged with in a $13.3 billion combination of two big providers of orthopedic, surgical and dental products, creating Zimmer Holdings.

(Reporting by in Bengaluru and in New York; additional reporting also by in Benaluru; Editing by and Marguerita Choy)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, June 11 2018. 23:33 IST