Zimmer set to take over Centerpulse
The United States Zimmer company has won a bidding battle for Swiss orthopaedics firm, Centerpulse, after Britain’s Smith & Nephew declined to increase its bid.
Smith & Nephew on Wednesday said it would not up its £1.5 billion (SFr3.26 billion) offer for Europe’s largest medical devices concern.
The board of directors of Centerpulse, which has told shareholders that a link-up with either Zimmer or Smith & Nephew is in their long-term interests, was due to meet later to discuss the status of the takeover battle.
“As they have always said, they will recommend the higher offer and with the situation now it is easy to see who has the higher offer,” a Centerpulse spokeswoman said.
“The chances that Zimmer will be the winner are pretty clear,” she added.
Analyst Yasemin Ersan at the cantonal bank of Zurich shared the same view.
“If Smith & Nephew doesn’t raise the offer as announced today, you can assume that Zimmer will make the deal since its offer is about 23 per cent higher than that of Smith & Nephew,” she told swissifo.
“From my point of view there is no reason why the deal shouldn’t go through,” she added.
Zimmer, of Indiana, had made a $3.1 billion (SFr4.16 billion) counter offer in response to Smith & Nephew’s bid made in March.
“Our review of the circumstances did not identify enough value for a revised offer,” S&N chief executive Chris O’Donnell said in a statement.
Disciplined
“Smith & Nephew is a disciplined buyer,” he added.
Zimmer said it expected the takeover to go ahead. “We understand that the formal process still has several weeks to run,” said chief executive, Ray Elliot, in a statement.
“But we are pleased that our offer remains the superior one and the Centerpulse has indicated it will recommend the higher offer to its shareholders.”
If the Zimmer offer is accepted by Centerpulse shareholders, the company would become the leader in the $14 billion market for artificial knees, hips and spines. The market is growing by 12 per cent annually.
Smith & Nephew would have been boosted to third place from its current seventh position.
Formerly called Sulzer Medica, Centerpulse has been turning in solid figures of late after being hit in 2001 by legal action concerning faulty hip and knee implants.
The firm has had to put aside some $918 million to settle the litigation in the United States.
Centerpulse said that it had been on a “dynamic growth path” in 2002 with net profit increasing to SFr337 million after a 2001 loss of SFr1.2 billion.
swissinfo with agencies
Smith & Nephew has withdrawn from the bidding battle for Switzerland’s Centerpulse.
Zimmer of Indiana has offered $3.1 billion for the company.
If Zimmer acquires Centerpulse, it would become leader in a market worth $14 billion a year.
The timetable foresees that the offer period for both Smith & Nephew
and Zimmer Holdings will expire on August 27.
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