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Johnson & Johnson has once again agreed to buy heart device maker Guidant Corp., but for about $4 billion less than it offered 11 months ago. New Brunswick, N.J.-based Johnson said in a statement it would pay $21.5 billion for Guidant, which it originally agreed to buy for $25.4 billion in December 2004. J&J broke off the deal earlier this month after Indianapolis-based Guidant has been plagued this year by product recalls. Under the new offer, the health care products maker will pay $33.25 in cash and .493 of a Johnson & Johnson share, which values each Guidant share at $63.08. Given that Guidant has about 340 million fully diluted shares and $2.5 billion in cash, the deal has a net value of $19 billion. The J&J and Guidant boards have both approved the revised agreement, which must be ratified by Guidant shareholders. The Federal Trade Commission conditionally approved the deal earlier this month, but has required J&J to sell off certain rights and assets related to drug-eluting stents, endoscopic vessel harvesting products and anastomotic assist devices. The European Commission cleared the deal in August, and Johnson & Johnson is in the process of divesting the Cordis steerable guidewires business in Europe and the Guidant Endovascular Solutions business in Europe as conditions of that approval. The companies expect to close the deal in the first quarter. In the original deal, Johnson & Johnson sought advice from Goldman, Sachs & Co. and the law firm Cravath, Swaine & Moore. Guidant tapped Morgan Stanley and JPMorgan Chase & Co. and the law firm Skadden, Arps, Slate, Meagher & Flom. Copyright �2005 TDD, LLC. All rights reserved.

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