J&J Can Absorb Guidant

Johnson & Johnson has already demonstrated an incredible propensity to acquire and aborb companies, managing them at arms length and making them succeed. That J&J and Guidant renegotiated their deal, at $4B less than originally negotiated last year, speaks volumes about J&J’s ability to “absorb”. I was frankly surprised to have to wait until Tuesday (Nov. 15) to learn that a new deal had been struck following the Friday announcement that the original deal was not going to fly. Guidant’s recall woes can be dealt with (if you’re J&J). The underlying asset base and technology portfolio is sound. J&J will certainly come out of this with a new foothold in pacemakers plus $4 billion extra cash. We give an update on the latest developments in our November MedMarkets.

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