Johnson & Johnson's (J&J) planned $25.4 billion (€21 billion) purchase of Guidant was called into question yesterday after the two companies differed on whether Guidant's long-term financial health had been irreparably damaged by a recall of its heart devices.

J&J said the recall hurt Guidant's short- and long-term growth outlook, and indicated it may walk away from the deal unless it can slash the price. The companies had held talks, but failed to reach an agreement on revised terms, J&J said.

Guidant, meanwhile, said J&J remained legally obligated to close the deal.

It said its business fundamentals "are strong and our markets and products have attractive prospects for growth".

The sparring, which analysts said set the two sides up for a costly legal battle, followed the US Federal Trade Commission's approval of the deal.

Under the terms of the merger agreement, the companies must close the deal within 48 hours of receiving regulatory approval.

The antitrust regulators set conditions on the deal, including a requirement that J&J license a key stent technology to Abbott Laboratories.

Stents are tiny wire mesh tubes used to prop open arteries.

Walking away from the deal would leave J&J without a plan to expand its device business and offset shrinking pharmaceutical sales, analysts said.

Both companies employ significant numbers in Ireland.