Stryker to Buy Pfizer Orthopedic Unit

Medical-device maker Stryker Corp. said it would buy the Howmedica unit of Pfizer Inc. for $1.9 billion in cash, driving down the price of Stryker shares on concerns over the deal’s high price. The transaction would combine the world’s fifth- and third-largest makers of orthopedic implants, such as artificial hips and knees, continuing a consolidation occurring in the industry. It also would be by far the largest ever for Kalamazoo, Mich.-based Stryker, which plans to take a $400-million pretax charge against earnings in the fourth quarter related to the deal. With the addition of Rutherford, N.J.-based Howmedica, Stryker would hold about 15% of the world orthopedic market, which it estimates at about $10 billion. The transaction would complete Pfizer’s exit from the medical devices business. On the NYSE, Stryker shares dropped $5.75 to close at $36, and shares of New York-based Pfizer edged down 94 cents to close at $101.19.