Here's a classic corporate strategy puzzle: you have a big, successful business unit that's doing just fine, but you start wondering if it might do even better—and be worth more—on its own. That's the situation Johnson & Johnson (JNJ) finds itself in with its orthopedics division, DePuy Synthes. According to reports, the healthcare giant is now actively preparing to sell the unit, a move that could be worth over $20 billion.
Think of it this way: back in 2011, J&J shelled out a massive $21.3 billion to buy Synthes and merge it with its existing DePuy business, creating a powerhouse in joint replacements and trauma devices. It was a huge bet on orthopedics. Now, over a decade later, the company is considering cashing out that chip. In October 2025, J&J announced it planned to separate the Orthopedics business to sharpen its strategic focus. At the time, CFO Joseph Wolk said the company was preparing for all options, including a spinoff, but was "open to ideas that others might have," including a sale, if it meant greater value for shareholders.
So, why sell now? For one, it's a huge, attractive asset. DePuy Synthes isn't some small side project; it's a behemoth that generated $9.3 billion in annual sales from things like artificial hips and knees. Bloomberg Intelligence estimates the unit could be worth about $20 billion on its own, or roughly $28 billion including debt. That's the kind of number that gets Wall Street's attention.
And who might be interested in writing that check? The report suggests buyout firms are already circling, with several large private equity players reportedly considering teaming up for joint bids. It's also the kind of business that could tempt strategic buyers—other big medical device companies looking to instantly become a dominant player in orthopedics. J&J is reportedly getting its financial materials in order for meetings with potential suitors in the coming weeks, though discussions are still preliminary and a deal is far from guaranteed.
Analysts seem to think the logic checks out. A Bank of America analyst noted, "The exit makes sense, in our view; in the long-term, DePuy Synthes should benefit from improved focus and become more competitive." In other words, freed from the massive J&J corporate structure, the unit could potentially be nimbler and more aggressive.
The potential sale comes as J&J itself is performing well. The company reported fourth-quarter 2025 adjusted earnings of $2.46 per share, a 20.6% jump from the year before, beating analyst estimates. It's also forecasting 2026 sales to reach nearly $100 billion, ahead of consensus expectations. So this isn't a fire sale; it's a strategic move from a position of strength.
Johnson & Johnson shares closed up 0.78% at $246.91 on Thursday. The company is targeting completion of the separation within 18 to 24 months from its original October 2025 announcement. Whether that happens via a spinoff to shareholders or a multi-billion dollar check from a private equity consortium remains the $20 billion question.
