(Bloomberg) -- Medical device maker Globus Medical Inc. has made a preliminary approach to smaller competitor NuVasive Inc. about a potential takeover, according to people with knowledge of the matter.
The companies have held early talks about a possible combination, said the people, who asked not to be identified discussing confidential information. There's no certainty the two will reach a deal, the people said.
A representative for NuVasive declined to comment. Representatives for Globus didn't immediately respond to requests for comment.
A deal could give both companies more scale and negotiating power with hospitals, to whom their products are sold.
Developers and manufacturers of products used in spinal procedures have been pressured as patients deferred certain elective procedures due to the Covid-19 pandemic.
Shares of NuVasive climbed 7.7% to $60.50 at 13:38 p.m. in New York, valuing the company at $3.1 billion. The San Diego-based company develops and sells devices for the spine, including instruments for surgical access, spinal implants, software and imaging solutions. It has 2,700 employees and operates in more than 50 countries.
Audubon, Pennsylvania-based Globus develops, manufactures and distributes musculoskeletal devices like implants used by surgeons for procedures including spine or joint surgery. It had more than 2,200 employees as of last year and generated most of its sales in the U.S., but also sold its products in about 50 other countries, according to its annual regulatory filing.
Its stock fell as much as 6.8% Monday and was trading at $68.81, giving Globus a market valuation of $7 billion. The shares were up 13% this year through Friday, less than the 25% increase in the S&P 500 over the same period.
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