According to sources familiar with the situation, medical device producer Globus Medical Inc. has made primary contact with smaller competitor NuVasive Inc. regarding a possible takeover. According to the people who did not want to be identified, the companies have held preliminary discussions about a prospective merger because they were discussing proprietary information. However, according to the sources, there is no guarantee that the two will achieve an agreement. NuVasive’s spokesperson declined to comment.
Globus representatives did not respond to demands for comment right away. However, a merger might provide both corporations additional clout and bargaining leverage with the hospitals that buy their products. Patients deferring some elective surgeries because the Covid-19 outbreak put pressure on developers and producers of items used in spinal surgery. NuVasive’s stock rose 7.7% to $60.50 in New York at 1:38 p.m., valuing the firm at $3.1 billion.
According to its annual regulatory filing, it had over 2,200 employees as of last year and produced most of its sales in the United States. It also sold its products in around 50 other countries. Globus‘ stock dropped as much as 6.8% Monday, closing at $68.81, giving it a market value of $7 billion. The stock had gained 13% this year through Friday, compared to a 25% gain in the S&P 500 over the same period.