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Will Abbott and Johnson & Johnson Make a Deal?

By Dan Carroll - Sep 13, 2013 at 9:50AM

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As J&J contemplates letting go of its ortho diagnostics business, Abbott makes sense to snap up this sale.

Perhaps no health care company has as many moving parts as Johnson & Johnson (JNJ 0.88%), the sector's most recognizable name that commands a dominant position over seemingly every major medical industry, from consumer health to pharmaceuticals. But even Johnson & Johnson isn't afraid to shake things up when looking for growth, and the company's looking at doing that right now.

For months, talk has waxed and waned over whether J&J would move to sell its Ortho Clinical Diagnostics division. Now that talk is heating up: Sources close to the matter have said that J&J is kicking off the opening moves of the division's sale, which some analysts have said could earn the company up to $5 billion. While the division isn't a major part of J&J, it could be a huge win for a company that has changed dramatically in the past year and boasts a standout diagnostics division of its own: Abbott Labs (ABT 0.16%).

But is Abbott the right suitor for J&J's ortho business from an investor's standpoint? In the video below, Fool contributor Dan Carroll outlines what a potential Johnson & Johnson-Abbott Labs deal for the ortho business could mean for each company and stock -- and what investors should keep an eye out for going forward.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$168.24 (0.88%) $1.47
Abbott Laboratories Stock Quote
Abbott Laboratories
ABT
$110.14 (0.16%) $0.18
Roche Holding AG Stock Quote
Roche Holding AG
RHHBY
$42.10 (0.33%) $0.14
Siemens Aktiengesellschaft Stock Quote
Siemens Aktiengesellschaft
SIEGY
$54.41 (-2.25%) $-1.25

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