Guidant Recalls More Pacemakers, Merges with Boston Scientific
Boston Scientific and Guidant announce they signed a $27B merger agreement, so Boston Scientific’s latest bid finally — save for additional last-minute drama — overcame Johnson & Johnson’s deal. Pending FDA and EU approval, this will be the biggest merger ever in the medical device industry, creating a $9B annual turnover company. Those doubting the European Union’s power in such cases should ask General Electric whose merger with Honeywell was stopped in 2001, a decision confirmed by the European Court of First Instance last month. In this case antitrust approval should probably be secured because Boston Scientific will sell some of Guidant’s operations overlapping with its own to Abbott Laboratories (See the New York Times’ coverage).
J&J stated it would not counterbid and will console itself with a $705M breakup fee, but failing to secure this merger at a cost it liked is a blow to a company facing a tougher environment in drugs while medical devices increasingly appear more attractive. Still, given Guidant’s just issued expanded product recall, whether the price paid by Boston Scientific is right remains to be seen. After all, J&J and Guidant had recently agreed to a lower price to complete their merger originally inked a bit more than a year ago.
04/12/06 update: AP: European Regulators Approve Boston Scientific-Guidant Deal.
January 25, 2006 Related topics: Product Recalls, Mergers & Acquisitions, Quality, Safety, Errors, Cardiology