Johnson & Johnson
(NYSE: JNJ)
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announced today that it intends to separate its DePuy Synthes Orthopaedics business.
The company said the separation aims to enhance the strategic and operational focus of each company while driving stakeholder value. It marks the latest big business separation by a major medtech company in recent years. Examples include Zimmer Biomet selling its Spine & Dental business, Baxter selling its Kidney business and Medtronic and BD selling their Diabetes businesses.
(This announcement came alongside J&J’s third-quarter earnings report. Read about the results here.)
J&J says the intended separation would strengthen its own focus and accelerate the shift of its MedTech portfolio — one of the largest medtech businesses in the world — toward higher-growth and higher-margin markets. The transaction would establish a standalone orthpaedics business, operating as DePuy Synthes.
According to J&J, it DePuy Synthes would stand as the largest, most comprehensive orthopaedics-focused company with leading market share positions across major categories. The decision comes around two years after J&J put a restructuring plan into place for the business.
“This transaction enables Johnson & Johnson to further strengthen its focus and investment toward higher-growth areas where we can meaningfully extend and improve patient lives,” said Joaquin Duato, chair and CEO, Johnson & Johnson. “The planned separation reflects our long-standing commitment to portfolio optimization and value creation. We are confident that our Orthopaedics business will be better positioned to improve top-line growth and operating margins as a standalone business.”
Tim Schmid, Johnson & Johnson MedTech’s EVP and worldwide chair, will be among top medtech leaders discussing strategy at DeviceTalks West next week — Oct. 15–16, 2025 in Santa Clara, California. Register here. (Here’s a 25% off discount code: MD25OFF)
Following the completion of the separation, J&J says it expects to retain a leadership position across six key growth areas. Its Innovative Medicine and MedTech segments still cover oncology, immunology, neuroscience, cardiovascular, surgery and vision.
The company expects the separation to increase top-line growth and operating margins.
“This move would further enhance the market-leading position for DePuy Synthes and strengthen our overall MedTech business with a focus on Cardiovascular, Surgery and Vision,” added Tim Schmid, EVP, worldwide chair, MedTech. “Through the separation process, we will remain focused on setting our talented teams up for long-term success, while continuing to serve our customers and create healthier futures for patients around the world.”
Upon the completion of the deal, J&J expects DePuy to benefit from a more focused business model. The unit generated approximately $9.2 billion in sales in 2024.
BTIG analysts Ryan Zimmerman and Iseult McMahon believe the transaction is favorable for Stryker, Zimmer Biomet, and other orthopedic leaders. They said it it may lead to disruption and accelerated share losses within DePuy Synthes over the interim period.
Johnson & Johnson intends to explore multiple paths to separate the unit, targeting completion within 18 to 24 months. It says it plans to continue operating the business in alignment with its current strategy as the process takes place.
(J&J officials including Schmid recently talked about the company’s strategy toward M&A and other deals of this nature. Read here about Schmid’s take, as well as insights from Johnson & Johnson Head of Business Development Jennifer Kozak.)
Leader named for soon-to-be separated business
Johnson & Johnson said it appointed Namal Nawana to serve as worldwide president, DePuy Synthes, effective immediately.
Nawana’s responsibilities include leading the business through the separation process, reporting to Duato. The company expects him to continue leading DePuy Synthes following the completion of the separation.
“Namal brings extensive experience leading global public companies and a demonstrated track record of success in growing medical devices businesses. We are pleased to have an executive of Namal’s caliber step into this role and are confident he is the ideal leader to guide the new DePuy Synthes into the future,” said Duato.
Nawana most recently served as executive chair and founder of Sapphiros, a platform company building consumer diagnostic technologies. Previously, he served as CEO and a member of the board at fellow orthopedic giant Smith+Nephew. He also served as president and CEO at Alere, a point-of-care diagnostics company, until its acquisition by Abbot.
Prior to Alere, Nawana spent more than 15 years at Johnson & Johnson in progressively senior leadership roles. His final role came as worldwide president of DePuy Synthes Spine, meaning he brings some familiarity to his new role.
“I am honored to take on this role to lead the new DePuy Synthes, a global market leader with a deep heritage of innovation and a strong commercial platform that is well positioned to succeed as a standalone company,” Nawana said. “I look forward to working together with the broader team to meet our mission and keep people around the globe moving.”
