Zimmer

Zimmer Holdings’s announcement this past April that it had agreed to purchase crosstown rival Biomet sent shock waves through Warsaw, IN, where both firms are located, as well as the orthopedic devices sector as a whole.

The $13.35-billion deal nixed Biomet’s planned initial public offering and will make Zimmer the second-largest orthopedic devices manufacturer by sales (after Johnson & Johnson) if the deal goes through as expected early next year. Both European and U.S. regulators are currently reviewing the merger.

By jumping on the consolidation bandwagon, Zimmer will increase the breadth of its product line (gaining a foothold in the fast-growing sports medicine space), cut costs by an estimated $270 million per year by 2018, and be better-positioned to resist pricing pressures as hospitals continue to tighten their belts.  

[image courtesy of ZIMMER]