After being put on indefinite hold and, at times, rumored to be off the table entirely, the planned merger of Johnson & Johnson Inc. (J&J; New Brunswick, NJ) and Guidant Corp. (Indianapolis) is going forward after all. Under the revised terms of the transaction, J&J has agreed to pay Guidant $21.5 billion in cash and stock—about 15% less than the original $25.4 billion deal struck last December. Adjusting for Guidant's cash on hand at the close, both companies estimate the net cost of the acquisition to be about $19 billion.

The deal was settled at $63.03 for each Guidant share, approximately 17% less than the $76 share valuation associated with the original $25.4 billion deal. Guidant shareholders, who still must approve the sale, will receive $33.25 in cash and 0.493 share of J&J stock for each Guidant share, or about a 9% premium over the stock's closing share price on the day the settlement was announced.

J&J's Weldon: Reaching an accord.

Commenting on closing the deal, William C. Weldon, chair and CEO of J&J, said, “We are delighted that our companies have reached an accord. Our agreement demonstrates that we remain committed to the goal of together building an extraordinary cardiovascular business that can deliver better medical options sooner to millions of patients.”

Dollens and Cornelius: Exchanging the reins.

In a related action, Guidant has appointed James M. Cornelius as its interim chairman and CEO. Ron Dollens, Guidant CEO for the past 11 years, will pursue his previously announced retirement. Cornelius, noting that the agreement with J&J made sense for Guidant's shareholders and employees, said the company was enthusiastic about the deal's potential. “ The board believes that it is in the best interest of shareholders to proceed with the merger agreement at the revised terms. It amplifies the opportunity for us to do more for patients with cardiovascular disease through a union with Johnson & Johnson.”