Johnson & Johnson, New Brunswick, N.J., said its $25.4 billion offer to acquire Guidant Corp., Indianapolis, was made up of 60% stock and 40% cash to give J&J the financial latitude to pursue additional deals should it choose to do so.
In a conference call with analysts, J&J Executive Vice President and Chief Financial Officer Robert Darretta said the acquisition of Guidant, a leader in the fast-growing defibrillator and stent markets, would diversify J&J's revenue stream, reducing the company's reliance on pharmaceuticals.
Guidant would be combined with J&J's Cordis Corp., the first company to receive Food and Drug Administration approval to market a drug-eluting stent. The new company would be named Guidant.
The $76 per-share purchase -- $45.60 in J&J stock and $30.40 in cash for each share of Guidant -- requires the approval of Guidant shareholders, the Federal Trade Commission and European Union regulators. J&J said it was confident the deal would receive FTC antitrust clearance without the company having to divest or license out material businesses.
Officials said they hoped to complete the deal by the third quarter of 2005.
Guidant, a 1994 spinoff of Eli Lilly and Co., capitalized on breakthroughs in heart stents and pacemaker-defibrillator technology to become one of the world's top medical devicemakers with $3.6 billion in revenue.
The deal would be the largest in J&J's 118-year history, the Associated Press said.