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news.Johnson & Johnson and Guidant Corporation have entered into a revised agreement, under which the healthcare giant will acquire Guidant for $21.5 billion in fully diluted equity value - representing a 15% discount on the original deal.
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The companies originally entered into an agreement in December 2004, under which Johnson & Johnson was to pay $25.4 billion for Guidant. However, product recalls at Guidant and associated regulatory investigations had threatened to derail the purchase entirely until the companies announced the new deal.
Each share of Guidant common stock will be exchanged for $33.25 in cash and 493 shares of Johnson & Johnson common stock. Valued as of the market close on November 14, 2005, the transaction has a per share value of $63.08 to Guidant shareholders.
Shareholders in Guidant are still to vote on the revised agreement, but, pending their approval, the companies expect to close the transaction in the first quarter of 2006.
“Our enthusiasm for this agreement and its potential continues. This agreement makes sense for Guidant shareholders and employees,” said James Cornelius, chairman of Guidant.