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The proposed acquisition of Guidant (Indianapolis) by Johnson & Johnson (J&J; New Brunswick, New Jersey) for a whopping $24 billion, announced in mid-December, is both the biggest ever in the medical device sector and the largest for J&J over its 118 years of existence. Proposed terms call for each Guidant share to be exchanged for $30.40 in cash and $45.60 in J&J stock.

No specific date was given for closure of the deal, but J&J officials suggested it might come no later than July. J&J said it would create a new medical device and diagnostic unit named Guidant, with that business able to bill itself as the largest medical device business in the world.

Ron Dollens, Guidant's CEO since its spin-out from Eli Lilly and Co. (also Indianapolis) 10 years ago, said that he would not leave the company at year-end 2004 as previously planned, but instead would stay until the integration of the two firms is complete.

Michael Dormer, chairman of J&J's medical device unit attempted to allay the fears that usually come with restructuring by saying that cutbacks in employees and business lines would not be "significant." The deal, he said, is "not based on cost-cutting and cost-control."