Johnson & Johnson wins cheaper price for Guidant
Johnson & Johnson secured a 15% cut in its Guidant purchase price, clearing the way to add the device company to its roster of operating companies.
The new terms mean J&J will buy Guidant--maker of defibrillators and pacemakers--for $21.5 billion, or $63.08 per share, instead of the prior $25.4 billion, or $76 a share, they had agreed on in December.
J&J will pay $33.25 cash and 0.49 of a J&J share to Guidant shareholders, who will vote on the new deal in January.
By hammering out a deal, the two companies avoided a prolonged legal battle, which Guidant started last week when it sued J&J in federal court to force it to abide by original terms. Johnson & Johnson had claimed it should not be held to because Guidant's long-term financial outlook had materially suffered by product problems. Guidant charged that the damages were short-term.
Ronald Dollens retired from his post as Guidant chief executive, with James Cornelius, chairman, assuming his duties during the transition.