Guidant has announced that it is suing Johnson & Johnson (J&J) to compel the company to complete its planned purchase of Guidant.
Guidant filed suit in the U.S. District Court for the Southern District of New York to ensure that J&J completes the merger by Dec. 15. Recent legal troubles stemming from Guidant's handling of problems with its implantable cardioverter defibrillators (ICDs) has led J&J to reconsider completing the $25.4 billion deal.
Guidant intends to ask the court to expedite pre-trial discovery in order to resolve the matter as quickly as possible.
J&J "believes that it is not required under the terms of the merger agreement to close the Guidant transaction. The Company views the previously announced product recalls at Guidant and the related regulatory investigations, claims and other developments as serious matters affecting both Guidant's short-term results and long-term outlook. Johnson & Johnson believes those events have had a material adverse effect on Guidant and, as a result, that it is not required to close the acquisition," the company said in a statement.
Meanwhile, Guidant reported third-quarter profit $130 million, 14 percent lower than last year. The company posted sales of $795 million in the third quarter.
The company said that the drop in revenue is due to the ICD problems, which resulted in temporary unavailability of those devices during July and part of August, and a decrease in sales of the ICDs.