Johnson & Johnson (JNJ) is in talks to acquire medical device maker Synthes in what may be the 125-year-old company's biggest deal ever. Valued at $19.4 billion, Synthes has an operating margin of 35 percent, the highest among medical-products makers worth more than $5 billion in sales, according to Bloomberg data. The acquisition would increase J&J's share of the $5.5 billion orthopedic trauma market to 54 percent, from about 5 percent, and nearly double the company's 11 percent share of the $9 billion spinal-care market, according to analysts at Wells Fargo (WFC) and Sanford C. Bernstein (AB). J&J's image has been hit as a result of over 50 drug and device recalls since the start of 2010.
Wal-Mart Stores: Deeper into Social Media
Wal-Mart (WMT) on Apr. 18 agreed to buy social media company Kosmix for an undisclosed sum to expand its online operations. Mountain View (Calif.)-based Kosmix, founded in 2004, will be part of the retail giant's newly formed @WalmartLabs unit, which explores how consumers shop using social media and mobile phones, the company says. Kosmix founders Venky Harinarayan and Anand Rajaraman, pioneers of online shopping, sold their first company, Junglee, to Amazon.com (AMZN) in 1998.
General Electric: Adjusting the Boss's Pay
With its annual shareholder meeting looming, General Electric (GE) amended the terms of the 2 million options awarded to CEO Jeffrey Immelt in 2010, linking them to the company's industrial cash flow and stock performance. GE's options award—its first since 2003—was granted after Immelt steered the company, including GE Capital, successfully through the financial crisis. The new terms place more weight on GE's stock performance relative to the Standard & Poor's 500-stock index.
Chinese Auto Market: GM and VW Ignore Beijing's Wishes
General Motors (GM)and Volkswagen expect to boost vehicle sales in China faster than the nation's economic growth rate, defying government policies to curb sales by ending industry subsidies and placing restrictions on new car licenses in cities like Shanghai and Beijing. VW says it may outpace industrywide sales growth of up to 12 percent. GM hopes to double sales in China to 5 million vehicles by 2015, a target that may enable the U.S. carmaker to retake the global sales title it lost to Toyota in 2008.
Taylor, Bean & Whitaker: Ex-Chairman Found Guilty of Fraud
Lee Farkas, the ex-chairman of Taylor, Bean & Whitaker Mortgage, on Apr. 19 was found guilty of 14 counts of conspiracy and fraud in what prosecutors said was a $3 billion scheme involving fake mortgage assets. Prosecutors allege Farkas masked shortfalls by moving money between accounts and created more than $1.4 million in bogus residential mortgage loans to dupe major financial institutions. By 2003, Taylor Bean was overdrawing its accounts by $150 million a day. Farkas will be sentenced on July 1.
On the Move
— Reckitt Benckiser Group: Rakesh Kapoor appointed CEO.
— Goldman Sachs (GS): Esta Stecher named CEO of firm's deposit-taking bank unit.
— Lloyd's of London: John Nelson appointed chairman.