Johnson and Johnson's newfound dominance of the orthopedic-device market, cemented by its $21.3 billion acquisition of Synthes, may drive rivals Zimmer Holdings and Stryker to seek purchases of their own.

The deal announced yesterday boosts J&J's share of the $5.5 billion market for tools to treat bone fractures and traumatic injuries to 55 per cent, from 5 per cent, and doubles its slice of the $9 billion spinal-care segment to 22 per cent, said Larry Biegelsen, a Wells Fargo and Co analyst in New York.

That may pressure Zimmer and Stryker, which mostly build devices for knee and hip replacements, to bulk up by acquiring smaller orthopedic companies in faster-growing parts of the industry, said David Turkaly, a Susquehanna Financial Group analyst in New York. Likely targets include ArthroCare, BioMimetic Therapeutics, Wright Medical Group and Mako Surgical Group, he said.

J&J will buy Synthes, the biggest maker of trauma devices, for a mix of cash and stock, in an acquisition that may close in the first half of 2012, pending regulatory reviews, the two companies said.

Orthopedics "is probably the largest opportunity in the whole medical device area", J&J chief executive William Weldon told analysts on a conference call yesterday.

The market will likely grow as developing countries expand their health-care spending while the global population ages and deals with growing obesity, said Alex Gorsky, vice-chairman of J&J's executive committee, in a telephone interview.

There have been 420 announced or completed deals in the US medical-products industry in the past five years, with an averaged disclosed size of $258.8 million and an average premium of 60 per cent, according to data compiled by Bloomberg. The Synthes acquisition would be the biggest since Biomet was bought in 2007 for $11.4 billion by a private-equity group of Blackstone Group LP, Goldman Sachs Group, KKR and Co and TPG Inc. It would also be the biggest in J&J's 125-year history.

Johnson and Johnson, which holds its annual shareholders' meeting tomorrow, has announced or completed 54 acquisitions in the past year, including the Synthes purchase, with an average deal size of $1.15 billion and an average premium of 37 per cent, according to Bloomberg data.

The company expects global sales of hip screws, bone grafts and other trauma tools to grow at about 7 per cent a year going forward, Michael Mahoney, J&J's worldwide chairman for medical devices, said on yesterday's analyst call.

Bloomberg