Johnson & Johnson, on the other hand, is one of the biggest names in the health care industry, serving customers around the globe with its baby care products, medical devices, medicines, body nutrition and other day to day consumer products (Jnj.com, 2013). The announcement by Johnson & Johnson had created waves in corporate world; firstly, this marked the biggest acquisition in this industry, and secondly it had multiple-fold effects disturbing many organizations within and outside the industry. Strategic Justification Johnson & Johnson was observed to be laying great emphasis on health care sector in recent years, and wanted to shift its focus from consumer products to healthcare products. Thus, in the words of CEO of Johnson & Johnson, acquisition of Synthes was all part of the big plan for Johnson & Johnson: becoming most wide-range orthopedics and neurologics business, serving customers worldwide in medical industry. This has enabled Johnson & Johnson to be the absolute provider of all related services in supply chain of orthopedics with a comprehensive coverage for all kinds of products and services. Synthes makes substantial profits in developing markets and third world nations. Therefore, the acquisition decision was in line with Johnson & Johnson’s long term strategy to promote well being of public, especially in underdeveloped and developing areas, through innovative and healthier products, putting the company in a stronger position than before. It also provided benefits of economies of scale, synergy and bulk buying to the group as they were engaged in similar businesses and therefore idle capacities and resources could now be better utilized, leading to efficient or full employment of factors of production and fall in unit costs as fixed costs were spread over larger number of units being produced (invertor.jnj.com, 2012). Regulatory implications When deciding on acquisition of Synthes, Johnson & Johnson had to consider all legal complications involved; one of them being prohibition of simultaneous holdings in Synthes and DePuy orthopedics subsidiary. Johnson & Johnson and Synthes have been direct competitors in certain sectors of medical equipment and surgical treatment goods and therefore, Federal Trade Commission intervened to protect public interests (reuters.com, 2012). Antitrust regulations governed by the European Union and U.S. regulators were required to be satisfied and complied with to make due diligence effective. Consequently, it had to divest its stakes from DePuy in order to be able to make acquisition of Synthes legally possible. It accepted offer from Biomet, a company involved in surgical products and instruments to sell the subsidiary for $280 million, receivable in cash (Nj.com, 2013). On part of Synthes, there were past accusations regarding one of its business units, Norian, of conducting trials to promote its product without permission of relevant authorities. The company ended up paying a penalty and damages to another company, amounting to $22 million. It agreed to dispose of its unit which committed offence previously at its acquisition date (Bloomberg, 2013). Apart from mentioned implications, it was very vital to account for the deferred taxation repercussions involved in due diligence activities, including consideration of accumulated tax losses and deferred tax assets that could be utilized for tax avoidance tactics.