Johnson & Johnson to spin off $9.2B DePuy orthopedics division into independent company
Johnson & Johnson is planning to separate its orthopedics business—which primarily produces artificial knees and hips—into a new company, the New Jersey-based healthcare conglomerate said on Tuesday.
The spinoff will keep the branding used on the medical devices, DePuy Synthes. J&J said it expects the full breakup to be complete in 18 to 24 months, at which time DePuy will be the largest orthopedics company in the world.
In an interview with the Wall Street Journal, J&J Chief Financial Officer Joseph Wolk said the division is a “steady grower,” but noted that it isn’t “outperforming” compared to the company’s larger medical device portfolio.
Notably, J&J develops and produces a wide range of medical devices, from surgical devices to cardiac monitoring, up to and including common products such as contact lenses.
As the outlet noted, splitting off DePuy is the latest attempt by J&J to reduce bloat. In August 2023, it created Kenvue, now an independent publicly traded company, when it offloaded its consumer health products, including Tylenol and Benadryl.
At the time of separation, J&J maintained a 9.5% ownership stake in Kenvue stock—and something similar may happen to DePuy. J&J said it is looking at its options, but it could sell the unit to its current shareholders.
DePuy Synthes was created in 2012 when J&J purchased Synthes, a medical device company out of Switzerland, and combined it with its orthopedics company, DePuy, which it acquired in 1998.
Currently, the combined brand accounts for roughly 10% of J&J’s annual revenue. In 2024, it generated $9.2 billion in revenue.
More specifics of the separation will be revealed over the next year or two, as plans are finalized.
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