Guidant sues Johnson & Johnson to force takeover

Guidant Corporation announced on Monday 7 November that it was initiating a lawsuit against Johnson & Johnson to try to make it complete the acquisition of Guidant in accordance with the December 15, 2004 Merger Agreement. It could also mean a payment of a $700m breakup fee by Johnson & Johnson

Johnson & Johnson stated last week that due to the product recalls and regulatory investigation that it "was not required under the terms of the merger agreement to close the Guidant acquisition". (see story Johnson & Johnson $25.4bn takeover of Guidant in doubt as Guidant faces lawsuits). Johnson & Johnson stated on Monday that it "will vigorously oppose the lawsuit and take all necessary action to enforce its rights under the merger agreement".

The Motley Fool considers that Guidant is obliged take action for the benefit of its shareholders and that if the deal does fall through Guidant could still be in line for a takeover by the likes of Abbott Labs or Boston Scientific.

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