Reports emerged Friday that Apollo Global Management is in advanced talks to buy Johnson & Johnson's orthopedics division — the world's largest maker of hip and knee replacement devices — for close to $20 billion. An agreement could be reached within several weeks, though the talks could still end without one, or another bidder could emerge. For J&J shareholders sitting on a $640 billion market cap, the question is whether this deal extracts fair value or leaves billions on the table.
The Price Tag May Shortchange J&J by Billions. Bloomberg Intelligence analyst Matt Henriksson has estimated the unit could be worth about $28 billion, including debt.
At $9.3 billion in revenue, the ~$20 billion equity price implies roughly 2.1x sales — a thin number for a medical device franchise with recurring surgical demand. J&J retains the option of spinning off the orthopedics operation as a publicly traded company , and a competitive auction or IPO could close that $8 billion gap between the Apollo bid and the Bloomberg Intelligence estimate. The presence of several private equity firms circling the asset gives J&J leverage to push the price higher.
J&J Is Betting Its Future on Faster-Growing Businesses. J&J is successfully shifting its MedTech portfolio to high-growth markets, particularly cardiovascular, where acquisitions of Shockwave and Abiomed made it a category leader.
Cardiovascular sales rose 15.8% to $8.9 billion in 2025 — nearly matching orthopedics revenue but growing four times faster. Shedding the slower orthopedics unit lets management concentrate capital on drug development and high-margin surgical innovation, a playbook it started by spinning off consumer brand Kenvue in 2023.
Apollo Would Own the Biggest Standalone Orthopedics Company on Earth. If DePuy Synthes becomes independent, it would stand as the largest orthopedics business globally.
Private equity firms have grown more confident pursuing large-scale healthcare assets, and acquiring DePuy Synthes would allow sponsors to deploy significant capital into a defensive, cash-generative medical technology platform. Aging populations virtually guarantee steady demand for joint replacements for decades.
Shareholders Need to Watch the Final Number, Not Just the Headline. The separation would unwind J&J's $21.3 billion acquisition of Synthes made in 2011 — meaning a $20 billion sale, after fifteen years of ownership, would deliver less than J&J originally paid. Potential tariff costs of approximately $500 million could also hurt MedTech margins in 2026 , adding urgency to sell now. The deal isn't done — but how much J&J ultimately collects will signal whether this restructuring creates real value or merely reshuffles the deck.