May 22 2003
US-based orthopaedic implant manufacturer Zimmer have announced their intentions to acquire fellow implant manufacturer Centrepulse.
The most recent offer comes after several discussions between the two last year in which they agreed that their businesses were a good fit both in terms of geography and product lines. Pursuant to this an offer was made in October.
More recently, another player in the market, Smith and Nephew have also made an offer to acquire Centrepulse, prompting Zimmer to up their original offer.
The latest Zimmer offer for outstanding Centrepulse shares offers CHF120 in cash and 3.68 shares of Zimmer common stock per Centrepulse share, or (approximately) the equivalent of CHF350 per share. The total value of their offer is about $3.1 billion, compared to a recently submitted Smith and Nephew offer of $2.25 billion.
While the offers seem significantly different, the main difference is that Smith and Nephew have already carried out their due diligence, while Zimmer yet to begin theirs. This means that the Zimmer's offer could be eroded for reasons such as litigation risks, tax liabilities and other related expanses.
Should the Zimmer takeover go ahead, the combination will form the number 1, pure play orthopaedic supplier in the world.
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