Medical-device maker Boston Scientific Corp. will pay Johnson & Johnson $600 million to resolve a dispute over J&J's 2006 acquisition of Guidant.
J&J sought more than $7 billion in damages after losing Guidant to Boston Scientific in a bidding war despite having already reached an initial deal to acquire Guidant, a manufacturer of pacemakers, stents and other cardiac devices.
Guidant did not admit to any wrongdoing as part of the settlement, according to Marlborough, Mass.-based Boston Scientific.
“We feel this settlement is in the best interests of the company and its shareholders,” Tim Pratt, Boston Scientific executive vice president, chief administrative officer, general counsel and secretary, said in a statement.
J&J, however, said the settlement shows the importance of abiding by merger agreements.
“This case was about playing by the rules, and today's $600 million settlement, which was reached after all of the evidence was presented at trial and before the court rendered its decision, reflects how important it is for parties involved in merger agreements to fully live up to their obligations,” New Jersey-based J&J said in a statement. “Including the $705 million breakup fee that Guidant previously paid, Johnson & Johnson has now received total payments of $1.305 billion in regard to this matter.”
Arguments in the case were heard in U.S. District Court in the Southern District of New York on Jan. 21.
Boston Scientific has also agreed not to bring patent infringement lawsuits against J&J related to its stent products in connection with the settlement announced Tuesday, according to Boston Scientific.
Boston Scientific expects to record the $600 million pre-tax expense within its fourth quarter 2014 results.
Follow Lisa Schencker on Twitter: @lschencker