Originally Published MX January/February 2005
BUSINESS NEWS
J&J Gets Guidant |
| Weldon |
Over the years they've talked before—but to no avail. But this time—pending antitrust scrutiny by the Securities and Exchange Commission (SEC)—the deal between Johnson & Johnson Inc. (New Brunswick, NJ) and Guidant Corp. (Indianapolis) looks like the real thing.
Under the terms of the deal, J&J will pay $23.9 billion to acquire Guidant. The deal represents the largest-ever acquisition by J&J, almost doubling the $13 billion the company paid for drug-delivery firm Alza in 2001.
In acquiring Guidant, J&J gains access to the company's cardiac rhythm management business, a medical device segment in which J&J currently has no products. Guidant's 2003 sales from implantable defibrillators and pacemakers were around $2.2 billion of its $3.7 billion total revenue for the year. Commenting on the acquisition, William C. Weldon, chairman and CEO of Johnson & Johnson, said, "The combination of these businesses will enable us to bring innovative new therapies to patients and their physicians in this very important and fast-growing therapeutic area."
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| Valeriani |
The acquisition will result in a newly created cardiovascular device unit within J&J to be known as Guidant, while the Cordis name will be "retained for select businesses within the franchise." The new Guidant business unit will report to Nicholas J. Valeriani, a member of J&J's executive committee.
In a postacquisition announcement conference call with industry analysts and investors, J&J said it was confident that it would obtain antitrust approval by the necessary regulatory authorities. "We do not expect any divestitures that will be material to the transaction," chief financial officer Robert J. Darretta said.
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