Smith+Nephew cuts outlook after ending J&J orthopaedics merger talks
Smith+Nephew is lowering its full-year revenue and profit expectations as weak growth in its Orthopaedics unit continues into the final quarter. The UK medical technology company also confirms that merger discussions held earlier this year with Johnson & Johnson's orthopaedics arm have now ended.
Highlights
- Smith+Nephew confirmed merger talks with Johnson & Johnson's orthopaedics business have ended, with no details disclosed on the breakdown.
- The company lowered its full-year revenue and profit forecasts, citing persistent slowdown in its Orthopaedics unit through the final quarter.
- Smith+Nephew will continue to explore strategic options for its underperforming Orthopaedics division to address weak growth and market positioning.
Outlook cut and merger discussions end
As reported by Reuters, Smith+Nephew says it approached Johnson & Johnson earlier this year about a potential merger involving the U.S. group's orthopaedics business, but those conversations have since ended.The company does not give details on why the talks ended. Reuters reported in October that the discussions collapsed over disagreements about who would lead the enlarged group.
Smith+Nephew also says it is cutting its full-year revenue and profit forecasts as the slowdown in its Orthopaedics unit is expected to persist through the final quarter.
Strategic options remain in focus
The failed talks come as Smith+Nephew continues to grapple with weak growth in orthopaedics, one of its key business areas. That pressure is weighing on the company's operating outlook and increasing the importance of steps to improve performance in the division.Smith+Nephew says it will continue to explore strategic options for the business, signalling that it is still considering ways to address the unit's weaker momentum and reshape its position in the orthopaedics market.
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