Rumors earlier today that Stryker (NYSE:SYK) was considering acquiring rival Smith & Nephew (NYSE:SNN) were promptly shut down by Stryker management. The UK takeover laws now require a six month wait before Stryker could put in a bid for the company.
But would such a deal make sense if it were to go through?
There are a number of potential reasons to like such a deal -- some scale benefits by combining product lines, potential benefits stemming from a tax inversion, and the potential for Stryker to expand into new product areas.
In the video below, from Market Checkup, the Motley Fool's health care-focused investing show, health care analysts Michael Douglass and David Williamson lay out the case for why, if Stryker's management isn't planning to acquire Smith & Nephew, maybe they should think about it.
David Williamson owns shares of Johnson & Johnson. Michael Douglass has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Intuitive Surgical and 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.