Johnson & Johnson will acquire troubled medical device maker Guidant for $23.2 billion, the two companies said.
The agreement came after the boards of both firms unanimously approved a revised Johnson & Johnson offer under which the company will pay $37.25 in cash and 0.493 shares of Johnson & Johnson common stock for each outstanding share of Guidant stock.
It means Guidant will be acquired at a total of $68.06 per share based on yesterday's market close.
In December 2004, New Jersey-based Johnson & Johnson, which has more than 200 operating companies and employs nearly 115,000 people around the world, bid $76 a share for Guidant.
It lowered its offer 11 months later to $63.08, citing concerns about Guidant's financial outlook.
Since June, Indiana-based Guidant has recalled or issued safety warnings to about 88,000 heart defibrillators and almost 200,000 pacemakers - core products that Johnson & Johnson says it plans to shore up after the merger is complete.
Adding to Guidant's woes, federal prosecutors in Minnesota and Massachusetts have issued subpoenas seeking more information on the recalled devices. New York Attorney General Eliot Spitzer has filed suit against Guidant for allegedly failing to inform doctors about a suspected flaw in one of its recalled heart defibrillators.
Its financial and legal problems notwithstanding, Guidant remains attractive to outside bidders because it owns rights to a line of drug-coated stents, tiny devices used to open clogged arteries for people suffering from life-threatening heart conditions.
