(Reuters) – Medical device maker Stryker Corp has made a takeover approach to rival Boston Scientific Corp, the Wall Street Journal reported on Monday, a combination that would give Stryker a strong position in stroke preventing interventional cardiology.
It is not clear whether Boston Scientific is receptive to the potential acquisition by Stryker, the Journal reported, citing people familiar with the matter.
Shares of Boston Scientific, which had market value of $44 billion as of Friday’s close, were up 9.5 percent at $34.97, while Stryker shares were down 3 percent at $173.65 in midday trading.
Stryker had a market value of nearly $67 billion, as of Friday close.
“As a matter of company policy, we do not comment on potential M&A,” Stryker said. Boston Scientific did not immediately respond to requests for comment.
If the deal were to happen, Stryker would get Boston Scientific’s line of stents, defibrillators and its Watchman atrial device to prevent migration of blood clots. The company also has numerous other product lines that could enhance Stryker’s offerings, including in orthopedic surgery and neurological surgery products.
Boston Scientific lags behind Edwards Lifesciences Corp and Medtronic Plc in the fast-growing heart valve replacement market and has pinned its hopes on its updated Lotus device, set for launch in 2019 after withdrawal of an earlier version from Europe last year.
“If this news is accurate, it would create a roughly $24 billion medtech company, which would place it behind only Medtronic and Johnson & Johnson in total device revenue,” Wells Fargo Securities analyst Lawrence Biegelsen said in a research note.
He added that the combination would be one of broader scale with limited product overlap.
Stryker already has a leading position in orthopedics, such as spinal surgery devices and joint replacement, as well as medical and surgical equipment.
There had been a slow stream of large consolidation deals in the medical device sector in recent years.
Early last year, Abbott Laborotaries completed a $25 billion purchase of St Jude medical, acquiring its chronic pain management business and significantly enhancing its cardiovascular device offerings, such as devices to treat atrial fibrillation to lower the risk of stroke.
In one of the largest deals in the sector, Medtronic Plc in early 2015 completed an acquisition of Covidien for about $43 billion. The tax inversion deal enabled formerly Minneapolis-based Medtronic to take advantage of much lower corporate tax rates by moving its headquarters to Ireland. Covidien was originally spun off from Tyco International in 2007.
Reporting by Ankur Banerjee in Bengaluru and Bill Berkrot in New York; additional reporting also by Tamara Mathias in Benaluru; Editing by Shailesh Kuber and Marguerita Choy