Activist investor Jana Partners has reportedly taken a stake in The Cooper Companies ( COO ) and is pressing the medical-device maker to evaluate strategic alternatives — including a potential merger between its contact-lens division and Bausch + Lomb ( BLCO ) .

CooperCompanies approved a $1 billion increase in its share repurchase program to $2 billion in September.

Citing people familiar with the matter, the Wall Street Journal reported that Jana's campaign centers on unlocking shareholder value by improving capital allocation, enhancing returns, and possibly separating Cooper's two distinct business segments.

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Jana told WSJ the company's contact-lens and women's health units lack synergies and have failed to deliver meaningful shareholder gains.

Bausch + Lomb ( BLCO ) CEO Brent Saunders has already voiced openness to the idea, telling The Wall Street Journal that a merger would create a stronger competitor in the global contact-lens market.

"A potential combination with Cooper would strengthen competition and create a more scaled company in the contact-lens segment," Saunders said.

Cooper, valued at around $14 billion, has seen its shares fall more than 20% this year.

Through its CooperVision segment, Cooper produces contact lenses and vision-care products.

Its CooperSurgical division provides products and services focused on women's health and fertility.

Jana, however, contends that the combination of these two business areas has resulted in operational inefficiencies and limited shareholder returns.

Bausch + Lomb ( BLCO ), with a market capitalization of roughly $5.3 billion, was previously spun off from a larger health conglomerate under Saunders' leadership.

The company competes alongside Cooper, Johnson & Johnson ( JNJ ) , and Switzerland-based Alcon ( ALC ) Plc in the contact-lens segment.

In May, the U.S. Food and Drug Administration (FDA) approved Alcon’s Tryptyr (acoltremon ophthalmic solution) 0.003%, formerly known as AR-15512, for signs and symptoms of Dry Eye Disease (DED).

Sources familiar with Jana's position suggest Cooper's business segments could attract interested buyers.

The Wall Street Journal report highlights that the CooperVision-Bausch + Lomb merger could appeal strongly to investors by creating scale and improving competitive positioning in a market dominated by large players.

Third quarter sales for the CooperVision segment were $718.4 million, up 6% year over year. Sales for the fourth quarter are expected between $700 million and $713 million, with $2.73 billion-$2.75 billion for fiscal 2025.

CooperSurgical sales jumped 4% to $341.9 million. Sales for the fourth quarter are expected to be between $350 million and $356 million, with $1.34 billion-$1.35 billion for fiscal 2025.

Price Action: COO stock is up 6.57% at $76.70 during the premarket session at the last check on Monday.

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