J&J is in talks to sell its hips-and-knees business, DePuy Synthes, to Apollo Global Management for $20 billion. The health-products company plans to hive off the unit to focus on higher-growth areas. This strategic move aims to streamline operations and boost profitability.

The potential sale represents one of the largest divestitures in healthcare history. J&J will retain its core pharmaceutical and medical device businesses. Apollo, a private equity firm, has been seeking to expand its healthcare portfolio.

The deal is expected to close by year-end 2024, pending regulatory approvals. DePuy Synthes generates significant revenue from joint replacement implants. J&J's decision follows pressure to improve margins.

The transaction will allow Apollo to integrate the business into its existing healthcare investments. J&J's CEO stated the move aligns with long-term strategy. This sale could set a precedent for other large healthcare divestitures.

The market reacted positively to the announcement. Apollo's experience in healthcare turnarounds makes it a strategic buyer. The deal highlights the trend of big pharma focusing on core competencies.

J&J's focus on higher-growth areas includes digital health and biotech. The sale may impact competition in the orthopedic device market. This transaction underscores the evolving landscape of healthcare ownership.