Johnson & Johnson is in talks to sell its DePuy Synthes hips-and-knees business to Apollo Global Management for close to $20 billion, with an agreement possible within weeks. The unit generated $9.3 billion in 2025 sales but grew just 1.1%, far below the 15.8% expansion in J&J's cardiovascular business it now wants to fund. J&J could still pursue a tax-free spin-off instead.
Apollo Global Management is negotiating to buy Johnson & Johnson's DePuy Synthes orthopedics business for close to $20 billion, a price that would value the hips-and-knees unit at roughly 2.2 times its $9.3 billion of 2025 sales and hand the world's largest device maker a clean exit from its slowest-growing franchise.
An agreement could be reached within several weeks, though the talks could still collapse, a rival bidder could emerge, or J&J could instead spin the business off to shareholders as a publicly traded company, according to Bloomberg News, which first reported the discussions on Sept. 11. Neither Apollo nor J&J commented to Reuters outside regular business hours.
The unit J&J is trying to shed is not a distressed asset. DePuy Synthes generated $9.3 billion in 2025 sales, up 1.1%, and serves roughly 7 million patients a year, according to company disclosures. But that growth rate sits far below the cardiovascular business J&J now wants to fund, which posted $8.9 billion of 2025 sales and expanded 15.8%. J&J reported total 2025 revenue of $94.193 billion, a 6.0% increase.
The gap explains the strategy. J&J Chief Executive Joaquin Duato told analysts on the company's third-quarter call that the separation "further sharpens our focus as a healthcare innovation leader and accelerates the shift of our Medtech portfolio to areas of greatest unmet need and higher growth, which includes cardiovascular and robotic surgery."
The irony is that J&J built this business deliberately. It paid $21 billion for Synthes in 2012 and merged it with DePuy, assembling a franchise that J&J says would rank as the largest orthopedics company in the world if it stood alone. Fourteen years later, the same asset is being priced for exit.
Two forces pushed it there. First, hip and knee replacement is a mature market: procedure volumes grow with demographics, not with innovation cycles, and pricing faces pressure from hospital purchasing groups. Second, DePuy Synthes carries legal baggage. Thousands of lawsuits have been filed over its hip replacement devices, and J&J has been running a restructuring program — exiting certain markets, product lines and distribution arrangements — that is expected to cost about $1 billion in total.
For Apollo, the calculus is different. A $20 billion check buys a business with an installed base across hips, knees, trauma and spine, plus the scale to absorb the restructuring costs a strategic buyer would rather avoid. Apollo shares rose 0.84% to $128.98 on Sept. 11; J&J slipped 0.29% to $265.58.
The deal would extend a run of private equity money moving into healthcare. American Industrial Partners agreed to take Avanos Medical private for $1.27 billion in April, and Blackstone and TPG agreed to acquire diagnostic maker Hologic for more than $18 billion in 2025. A completed Apollo–DePuy transaction would be the largest of the three.
The competitive question is whether private equity ownership helps or hurts DePuy Synthes against Stryker and Zimmer Biomet, its two closest rivals in reconstructive implants.
A sponsor-owned DePuy would likely prioritize cash flow and margin over long-cycle research spending, which could cede ground on robotics — the segment where Stryker's Mako system and Zimmer Biomet's Rosa platform have set the pace. Alternatively, a standalone company with dedicated management and its own capital allocation could compete harder than a division inside a $94 billion parent that has already decided orthopedics is not a priority.
J&J has said it is not optimizing for any particular structure, only for value. Chief Financial Officer Joe Wolk previously said the company was exploring multiple paths, with a tax-free spin-off as the primary focus, and did not expect material updates until mid-2026. The original separation plan carried an 18-to-24-month timeline.
That leaves shareholders with a genuine fork. A spin-off would hand them stock in a company J&J itself describes as the world's largest pure-play orthopedics business. A sale would deliver roughly $20 billion of cash that J&J could direct toward buybacks, dividends, debt reduction or acquisitions in cardiovascular and surgical robotics. Which path wins depends on whether J&J can execute the spin-off tax-free — the single detail that will decide how much of that $20 billion actually reaches investors.
This article is for informational purposes only and does not constitute investment advice.
