US medical device giant C.R. Bard (NYSE:BCR) shares were up almost 20% on Monday as the medical device sector was thrown into focus, and the former agreed to be bought out.
It follows news that Bard will be bought by fellow titan Becton, Dickinson and Co after the pair agreed to combine in an eye watering $24bn deal.
Two of the largest healthcare suppliers
It brings together two of the largest healthcare suppliers together and throws the spotlight firmly on the sector where there have been several acquisitions recently as firms look to expand their portfolios to get better profit margins due to pricing pressure.
Becton, Dickinson will pay $317 a share for Bard in cash and shares.
That's about 25% more than Bard’s April 21 share closing price, the companies said at the weekend.
Both boards have reportedly unanimously agreed the deal.
Consolidation in the sector...
The deal comes two years after Becton Dickinson (NYSE: BDX), down 4.36% today, acquired CareFusion Corp (NYSE:CFN) for $12bn and in January this year, Abbott Laboratories (NYSE:ABT), up 1.56% today, acquired St Jude Medical Inc (NYSE:STJ) for $25 billion.
In 2015, Zimmer Holdings Inc merged with Biomet Inc for $13.4 billion, creating Zimmer Biomet Holdings Inc (NYSE:ZBH), whose shares were up 1.67% on the day.
Speaking of the Bard deal today, its chief executive Tim Ring said: "We are confident that this combination will deliver meaningful benefits for customers and patients, as we see opportunities to leverage Becton Dickinson's leadership, especially in medication management and infection prevention."
New Jersey based Becton Dickinson said it expected the acquisition to boost non-US growth options in markets, and to raise EPS (earnings per share) in fiscal year 2019.
With a larger portfolios, medical companies can offer hospitals and purchasers deals on products and services as they (hospitals) themselves merge into larger health systems and centralised operations.