Guidant accepts Boston Scientific's $27bn, Johnson & Johnson bows out
26 January 2006
Natick, MA and Indianapolis, IN, USA. Boston Scientific Corporation
(NYSE: BSX) and Guidant Corporation (NYSE: GDT) have announced that the
Board of Directors of Guidant has unanimously approved and entered into the
merger agreement provided to Guidant by Boston Scientific on January 17,
2006. Under that agreement, Boston Scientific will acquire all the
outstanding shares of Guidant for a combination of cash and stock worth $80
per Guidant share, or approximately $27 billion in aggregate.
Prior to entering into this agreement with Boston Scientific, Guidant
terminated its merger agreement with Johnson & Johnson. In accordance with
the terms of Guidant's agreement with Boston Scientific, Boston Scientific
will reimburse Guidant for the termination fee of $705 million payable to
Johnson & Johnson as a result of the termination. Guidant also announced
that the January 31, 2006 special meeting of Guidant shareholders to vote on
the merger with Johnson & Johnson has been cancelled. Johnson & Johnson said
that it had "determined not to increase its last offer for Guidant
Corporation, because to do so would not have been in the best interest of
its shareholders."
As a highly diversified company with leading positions in growth markets,
Boston Scientific/Guidant will be one of the world’s major medical device
companies, with total revenue in 2006 of nearly $9 billion.
“Guidant and Boston Scientific share an entrepreneurial spirit, highly
talented employees, strong customer relationships and an ability to pioneer
lifesaving therapies for patients around the world,” said Pete Nicholas,
Chairman of Boston Scientific. “Shareholders will benefit from the
significant upside potential of the combined company, while doctors and
their patients will continue to receive the most technologically advanced
and highest quality medical devices and therapies. The resources and
capabilities of the combined company will allow us to make further
investments in our current businesses as well as pursue new revenue
opportunities.”
“We believe the transaction and the strategic rationale for this combination
are in the best interests of our patients, employees, customers and
shareholders — reflecting the full value of our firm,” said Jim Cornelius,
Chairman and Chief Executive Officer of Guidant. “The combination of these
two companies provides faster, more consistent revenue growth opportunities
to shareholders. We want to express our appreciation to our employees who
have been dedicated to building this great company, and we all look forward
to the future.”
“We are excited about combining the talent and experience of Boston
Scientific and Guidant employees,” said Jim Tobin, President and Chief
Executive Officer of Boston Scientific. “We look forward to working with
Guidant to complete the transaction quickly and to creating a global leader
in cardiovascular devices.”
The transaction is subject to customary closing conditions, including
clearances under the Hart-Scott-Rodino Antitrust Improvements Act and the
European Union merger control regulation, as well as approval of Boston
Scientific and Guidant shareholders. The transaction is not subject to any
financing condition. Boston Scientific expects to complete the transaction
by the end of the first quarter of 2006.
As previously announced, Boston Scientific has entered into an agreement
with Abbott (NYSE: ABT) under which Boston Scientific has agreed to divest
Guidant’s vascular intervention and endovascular businesses, while agreeing
to share rights to Guidant’s drug-eluting stent program. Under its agreement
with Abbott, Boston Scientific will receive $6.4 billion in cash from Abbott
on or around the closing date of the Guidant transaction. This amount
consists of $4.1 billion in purchase price for the Guidant assets, a loan of
$900 million, and Abbott’s agreement to acquire $1.4 billion of Boston
Scientific common stock. Boston Scientific and Guidant believe that Boston
Scientific’s agreement with Abbott will enable Boston Scientific and Guidant
to rapidly secure antitrust approvals for the proposed transaction.
For the full statement see:
http://www.guidant.com/news/600/web_release/nr_000616.shtml
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