The divestiture of Johnson & Johnson's orthopedics business has taken a significant step forward, with a leading asset management firm now in advanced discussions to acquire the division.

According to a report from Bloomberg, Apollo Global Management is in talks with Johnson & Johnson to purchase DePuy Synthes, the orthopedics unit earmarked for separation, with the business currently valued at nearly $20 billion in these discussions. A deal could potentially be finalized within weeks, though negotiations may still fall through, and other bidders cannot be ruled out. The report indicates that multiple private equity firms have already expressed interest in DePuy Synthes.

However, the final structure of the separation remains undecided. Johnson & Johnson could still opt to spin off the business as a standalone publicly traded company. Neither Apollo nor Johnson & Johnson has commented on the matter as of yet.

Where things stand

Nearly a year after the separation announcement was made in October 2025, a potential buyer for DePuy Synthes has finally surfaced. Apollo, one of the world's largest alternative asset managers, oversaw approximately $1.05 trillion in assets under management as of the end of June 2026. Its private equity arm has long focused on large-scale mergers, corporate divestitures, and complex capital transactions.

In recent years, Apollo has been expanding its footprint in healthcare. In April, an Apollo-managed fund invested $1.25 billion in McKesson's Medical-Surgical Solutions business, securing roughly a 13% minority stake in a deal that valued the unit at around $13 billion overall. A potential $20 billion transaction for DePuy Synthes would be consistent with this strategy of pursuing large healthcare assets.

A mature business generating $9.3 billion annually

As one of the most important players in the global orthopedics market, DePuy Synthes holds considerable weight within Johnson & Johnson's broader portfolio. According to the company's 2025 annual report, orthopedics generated full-year sales of $9.258 billion, accounting for roughly 27% of MedTech revenue and reflecting a 1.1% year-over-year increase. Growth has continued into the first half of 2026, with core product lines such as knees and trauma performing particularly well.

During the first six months of 2026, Johnson & Johnson's orthopedics business posted sales of $4.801 billion, up 5.6% from $4.546 billion in the same period of 2025. Hips contributed $877 million, up 5.7%; knees added $830 million, up 6.7%; trauma brought in $1.660 billion, up 7.8%; and spine, sports medicine, and other segments generated $1.434 billion, up 2.6%.

Before any divestiture, DePuy Synthes has built a solid foundation and deep market presence as a leading global orthopedics company. It addresses a global market opportunity exceeding $50 billion and serves about 7 million patients annually. Its business spans joint reconstruction, trauma, spine, sports medicine, craniomaxillofacial, and extremities, with core products including the ATTUNE knee system, hip replacement offerings, trauma internal and external fixation systems, and the VELYS robotic and navigation platform. This creates a complete orthopedics portfolio from implants to surgical instruments to digital and robotic-assisted technologies.

Recently, DePuy Synthes also announced several collaborative initiatives, particularly in markerless tracking technology. Company executives describe this as the future direction for major orthopedic equipment, fundamentally changing how intraoperative imaging display and localization tracking work.

Why just one growth engine?

From a performance standpoint, Johnson & Johnson's orthopedics business remains on a growth trajectory. However, the decision to divest DePuy Synthes is less about the unit's profitability and more about resource allocation. Rather than continuing to invest heavily in a maturing orthopedics market, Johnson & Johnson appears focused on directing capital toward faster-growing, more innovative sectors.

Over recent years, the company has increasingly prioritized high-potential areas such as cardiovascular intervention, heart failure, cardiac recovery, and surgical robotics. In 2022, Johnson & Johnson acquired Abiomed for approximately $16.6 billion, bringing cardiac recovery into MedTech. In 2024, it bought Shockwave Medical for roughly $13.1 billion, entering the intravascular lithotripsy space. That same year, it continued with acquisitions of V-Wave and Laminar to further strengthen its heart failure and atrial fibrillation treatment offerings.

At the same time, Johnson & Johnson is investing heavily in innovation areas like surgical robotics. In July, its proprietary OTTAVA soft-tissue surgical robot received FDA De Novo marketing authorization and entered the U.S. commercialization phase. The company positions OTTAVA as a new category in soft-tissue robotics, designed to improve operating room throughput, streamline clinical workflows, enhance surgical data visualization, and enable more facilities to perform robotic-assisted surgery. The system further integrates robotics, surgical instruments, and a digital ecosystem, representing a key pillar of the next phase of its surgery business.

Looking at these moves, Johnson & Johnson's capital allocation strategy over the past few years is clear. On one side, it is divesting mature assets that are no longer in high-growth phases. On the other, it is using large acquisitions and in-house development to double down on innovation-dense fields. This balancing act is a common approach among global multinationals seeking to break through plateaus and enter their next growth chapter.

For Johnson & Johnson, the exact form of DePuy Synthes's departure is still undetermined, but the direction is becoming increasingly evident. What truly matters is not merely selling off a mature business, but freeing up resources to place fresh bets on the next wave of growth.