GUIDANT RESPONDS TO POTENTIAL CHANGE IN J&J DEAL
Guidant recently responded to news reports that Johnson & Johnson (J&J) wants to negotiate a lower purchase price for the company, arguing that its reduced profits are only temporary.
According to press accounts, J&J wants to renegotiate its purchase of Guidant, paying less than the $25.4 billion it agreed to pay in December 2004. But Guidant says that its recent forecasts of lower profits do not reflect the company's long-term viability. "Guidant believes that the strategic rationale for combining the two companies is as strong today as when we entered into the Merger Agreement," said Ronald Dollens, the company's president and CEO.
"While recent events and the publicity surrounding them will [affect] our short-term results, we believe that the fundamentals of our business and the markets we serve remain strong and our outlook is positive," Dollens added.
The company has been under fire for its handling of flaws with its implantable cardioverter defibrillator. Recently rumors have surfaced that the FDA will begin a criminal investigation into the company's conduct.