8-KOther EventsExhibits & Filings

JOHNSON & JOHNSON 8-K Report, Corporate Update (Nov 17, 2006)

Filed November 17, 2006For Securities:JNJ

Summary

Johnson & Johnson (JNJ) has announced a definitive agreement to acquire Conor Medsystems, Inc., a cardiovascular device company, for approximately $1.4 billion in an all-cash transaction. This acquisition is expected to close in the first quarter of 2007 and is subject to customary closing conditions, including regulatory and stockholder approvals. The strategic rationale behind this deal is Johnson & Johnson's expansion within the cardiovascular device market. While the acquisition is a significant investment, investors should note that JNJ anticipates a one-time after-tax charge of approximately $600 million related to in-process research and development (IPR&D) write-offs. This charge will impact short-term earnings but is a common occurrence in such strategic acquisitions aimed at bolstering future growth and product pipelines.

Key Highlights

  • 1Johnson & Johnson to acquire Conor Medsystems, Inc. for approximately $1.4 billion in cash.
  • 2Conor Medsystems is a cardiovascular device company.
  • 3Transaction is expected to close in the first quarter of 2007.
  • 4Acquisition is subject to antitrust clearance (Hart-Scott-Rodino), Conor Medsystems stockholder approval, and other customary closing conditions.
  • 5Johnson & Johnson anticipates a one-time after-tax charge of approximately $600 million for IPR&D write-offs.
  • 6The deal is structured as an all-cash merger, with Conor Medsystems stockholders to receive $33.50 per share.

Frequently Asked Questions

Johnson & Johnson expects to incur a one-time after-tax charge of approximately $600 million related to the write-off of in-process research and development (IPR&D). This charge will reduce earnings in the period it is recognized but is separate from the ongoing operational performance of the acquired business.

The acquisition of Conor Medsystems, a cardiovascular device company, indicates Johnson & Johnson's strategic intent to expand its presence and offerings within the cardiovascular medical device market. This move is likely aimed at enhancing JNJ's product portfolio and market share in this key therapeutic area.

The acquisition is contingent upon several conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act, approval from Conor Medsystems' stockholders, and other standard closing conditions typical for mergers and acquisitions.

Johnson & Johnson anticipates that the transaction will be completed in the first quarter of 2007, provided all closing conditions are met.