Johnson & Johnson’s recent spate of legal woes has not stopped the company from making a major new investment. On the heels of several product recalls, a $70 million settlement with the U.S. Department of Justice over foreign practices, and a $482 million patent infringement suit in February (U.S. 1, February 9), J&J announced it would buy Swiss medical device manufacturer Synthes for $21.3 billion.

J&J announced the deal at the end of April, saying it would boost its American orthopedics business in conjunction with its DuPuy unit. According to the company, the deal is a mix of one-third cash and two-thirds J&J stock.

The deal is expected to close in the first half of 2012.

J&J’s trouble with the Justice Department was settled only a few days before the Synthes announcement. The company announced that it will pay $70,006,316 in a settlement related to the federal Foreign Corrupt Practices Act (FCPA). In 2007 the company admitted that certain foreign subsidiaries connected to the United Nations Oil for Food program “were believed to have made improper payments in connection with the sale of medical devices.”

A U.N. report alleged that more than 2,000 companies worldwide acquiesced to the Iraqi government’s demands between 2001 and 2003 that they pay a 10 percent fee as a condition of importing humanitarian goods into the country.

Johnson & Johnson CEO William Weldon said the actions were “not representative of Johnson & Johnson employees around the world who do what is honest and right every day, in the conduct of our business and in service to patients and customers worldwide. We will continue to demonstrate that Johnson & Johnson is a company that embraces responsible corporate behavior.”

#b#Johnson & Johnson (JNJ)#/b#, One Johnson & Johnson Plaza, New Brunswick 08903; 732-524-0400; fax, 732-214-0332. William C. Weldon, chairman & CEO. www.jnj.com.

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