Sign in Subscribe
Medical equipment industry

Johnson & Johnson Acquires Guidant Corp. in $23.9 Billion Deal

Strategic Insights

— 2 min read

Johnson & Johnson's acquisition of Guidant Corp. for $23.9 billion is a significant move in the medical technology industry, especially for Minnesota-based Guidant, which employs about 3,000 people at its Arden Hills complex. The deal has far-reaching implications for the local economy and the cardiac rhythm management industry, which is expected to reach $8 billion in total market size. Johnson & Johnson aims to tap into the lucrative cardiology market through this acquisition, which marks the company's largest deal in its 118-year history.

Key Takeaways:

  • Johnson & Johnson's acquisition of Guidant Corp. is worth $23.9 billion, making it the company's largest deal in its history.
  • Guidant's local cardiac rhythm management division, which makes pacemakers and implantable defibrillators, generated $2.1 billion in sales last year and has been one of the company's fastest-growing businesses.
  • The deal requires approval from Guidant shareholders and is subject to an antitrust review by government regulators.
  • The combined entity will retain the Guidant name and operate as a decentralized management unit, with Nicholas Valeriani as its head.
  • The acquisition provides a boost to Johnson & Johnson's cardiovascular device business, which includes its Cypher stent, a competitor to Boston Scientific Corporation's drug-coated heart stent business in Maple Grove.
  • Guidant and its Minneapolis-based R&D center will become part of Johnson & Johnson's new cardiovascular device unit, retaining the Guidant name.
  • Medtronic Inc. and St. Jude Medical Inc. in Minnesota will face competition from the combined entity, which will have a stronger presence in the cardiac rhythm management market.
  • The deal has implications for employment levels in Arden Hills, with Guidant and Cordis Corp. uniting as a new cardiovascular device unit called Guidant.

Statistics:

  • The estimated total market for cardiac rhythm management is about $8 billion.
  • Guidant's local cardiac rhythm management division generated $2.1 billion in sales last year.
  • Johnson & Johnson's acquisition is worth $23.9 billion, marking the company's largest deal in its 118-year history.
  • The deal requires approval from Guidant shareholders, who will also exchange their shares for $30.40 in cash and $45.60 in Johnson & Johnson stock per share.
  • The combined entity will maintain Guidant's name and operate as a decentralized management unit, with Nicholas Valeriani as its head.

Sources:

  • Johnson & Johnson press release, [No specific date or date range mentioned]
  • Janet Moore, Staff Writer, The Star Tribune, "Johnson & Johnson to acquire Guidant Corp. for $23.9 billion", [No specific date or date range mentioned]
  • Boston Scientific Corporation, "Boston Scientific and Guidant to develop and market new cardiovascular devices", [No specific date or date range mentioned]
  • Medtronic Inc., "Medtronic developing its own drug-coated stent", [No specific date or date range mentioned]

Read more