Boston Scientific closes Guidant merger

04/24/06 - newratings.com

NEW YORK, April 24 (newratings.com) – Boston Scientific Corp (BSX), the world’s largest maker of heart stents, Friday announced that it had finally closed its merger with Guidant Corp.

The Natick, Massachusetts-based company received the final approval from US regulators for its $27 billion takeover of the Indianapolis-based defibrillator maker, clearing the way for the creation of the world’s largest heart-device maker. Boston Scientific won in the battle for Guidant by outbidding New Brunswick, New Jersey-based Johnson & Johnson’s offer by 12%, with a bid of $80 per share in cash and stock for the beleaguered medical devices maker. Boston Scientific has also closed the deal with Abbott Laboratories for the purchase of Guidant's vascular and endovascular business.

Boston Scientific’s chief executive Jim Tobin said the new entity would be a broadly diversified company and would "command a market valuation closer to our peers and generate significant upside potential for our stockholders." Boston Scientific expects its takeover of Guidant to nearly double its annual sales from $6.3 billion last year to about $12 billion by 2008.

Guidant’s stock ceased trading on the NYSE when markets closed on Friday. Following the merger, Fitch Ratings cut Boston Scientific's issuer default rating from "A" to "BBB," with a "stable" rating outlook.