Originally Published MX January/February 2006

BUSINESS NEWS

By the middle of November, Johnson & Johnson Inc. (J&J; New Brunswick, NJ) probably thought it had resolved the problems surrounding its nearly year-long move to acquire Guidant Corp. (Indianapolis). But less than three weeks later, rival cardiac device maker Boston Scientific Corp. (Natick, MA) emerged with a bid that put J&J's entire deal on ice.

Boston Scientific's bid of nearly $25 billion quickly garnered the interest of Guidant management and shareholders. It was about $4 billion more than J&J's renegotiated offer, which Guidant appeared to reluctantly accept following months of damaging disclosures and recalls of nearly 300,000 of its implantable cardioverter defibrillators (ICDs) and cardiac pacemakers.

The bid is only $400,000 less than J&J's original $25.4 billion offer, and was made just days after Boston Scientific was itself rumored to be a takeover target.