A $13-Billion Neighborhood Takeover

Zimmer Holdings, Inc goes 2.5 miles and becomes a dominant player.

Dave Williamson
Dave Williamson
Apr 25, 2014 at 7:00AM
Health Care

Zimmer (UNKNOWN:ZMH.DL) shocked the market yesterday, but it wasn't its regularly scheduled earnings that sent shares soaring 12% -- it was a surprise takeover.

Zimmer is scooping up fellow orthopedic company Biomet for $13.4 billion, before it priced its public offering. Given Zimmer's market cap of $17.3 billion this is essentially a merger of equals. Investors won't have to worry about any culture clashes; both company's are based out of Warsaw, Indiana, a town of only 15,000. However, this small-town collaboration will be a big-time player -- it will have the combined scale to surpass Styker (NYSE:SYK), and compete more effectively with Johnson & Johnson.

In this episode of Market Check-Up, the Motley Fool's health-care focused investing show, analysts David Williamson and Michael Douglass discuss the details of the deal and why this is a huge win for Zimmer investors.