8-KOther Events

JOHNSON & JOHNSON 8-K Report, Corporate Update (Nov 2, 2005)

Filed November 2, 2005For Securities:JNJ

Summary

Johnson & Johnson (JNJ) announced on November 2, 2005, that the Federal Trade Commission (FTC) has granted conditional approval for its proposed acquisition of Guidant Corporation. This approval, however, is contingent upon JNJ divesting specific assets and rights related to its drug-eluting stents, endoscopic vessel harvesting products, and anastomotic assist devices businesses. Furthermore, JNJ highlighted that it views the recent product recalls and regulatory investigations at Guidant as serious matters with a material adverse effect on Guidant's financial performance and outlook. As a result, JNJ stated that it is not obligated under the existing merger agreement to close the acquisition. While discussions with Guidant regarding a restructuring of the transaction terms have occurred, no agreement has been reached, and JNJ cannot guarantee a resumption or successful renegotiation of the deal.

Key Highlights

  • 1FTC conditionally approves Johnson & Johnson's acquisition of Guidant Corporation.
  • 2Approval requires divestiture of certain JNJ assets in drug-eluting stents, endoscopic vessel harvesting, and anastomotic assist devices.
  • 3JNJ views Guidant's product recalls and regulatory issues as having a material adverse effect.
  • 4JNJ believes it is not required to close the Guidant acquisition under the current merger agreement terms.
  • 5Discussions with Guidant regarding restructuring the acquisition terms have not resulted in an agreement.
  • 6JNJ cannot assure the resumption of discussions or a successful renegotiation of the deal.
  • 7This filing indicates significant uncertainty surrounding the completion of the Guidant acquisition.

Frequently Asked Questions

The Federal Trade Commission (FTC) has conditionally approved Johnson & Johnson's (JNJ) proposed acquisition of Guidant Corporation. However, this approval is subject to JNJ divesting certain assets from its own businesses.

The FTC's conditional approval requires JNJ to divest specific rights and assets from its drug-eluting stents, endoscopic vessel harvesting products, and anastomotic assist devices businesses.

JNJ has indicated that due to Guidant's product recalls and regulatory issues, which they believe have materially adversely affected Guidant, they are not required under the current merger agreement to close the acquisition. They have been in discussions to restructure the terms, but no agreement has been reached.

The completion of the acquisition is uncertain. While the FTC has given conditional approval, JNJ has stated it is not obligated to close under the current terms and that renegotiation discussions have not yet yielded an agreement. JNJ cannot guarantee that discussions will resume or be successful.