“The addition of Abiomed is an important step in our vision for the new Johnson & Johnson focused on Pharmaceutical and MedTech,” said CEO Joaquin Duato.
Abiomed (ABMD) – Get ABIOMED Inc. Report shares rocketed higher Tuesday after the medical technology group agreed to a $16.6 billion takeover by Johnson & Johnson (JNJ) – Get Johnson & Johnson Report that expands the group’s ambitions to grow its pharmaceutical and medical devices businesses over the coming years.
Johnson & Johnson said it will pay $380 per share for the Danvers, Massachusetts group, which specializes in heart pump and other medical devices linked to the treatment of cardiovascular diseases, as the group continues to shift focus away from its consumer healthcare business, which will be spun off later next year.
Abiomed will continue to operate as a stand-alone group within Johnson & Johnson’s medical technology division, the companies, said, with shareholders set to receive rights worth another $35 per share if further clinical milestones are met following the close of the transaction.
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“The addition of Abiomed is an important step in the execution of our strategic priorities and our vision for the new Johnson & Johnson focused on Pharmaceutical and MedTech,” said Johnson & Johnson CEO Joaquin Duato. “We have committed to enhancing our position in MedTech by entering high-growth segments. The addition of Abiomed provides a strategic platform to advance breakthrough treatments in cardiovascular disease and helps more patients around the world while driving value for our shareholders.”
Abiomed shares were marked 51.44% higher in pre-market trading immediately following news of the deal to indicate an opening bell price of $3891.95 each. Johnson & Johnson, meanwhile, fell 0.62% to $179.20 each.
Last month, Johnson & Johnson posted stronger-than-expected third quarter earnings of $$2.55 per share, on revenues of $23.8 billion, as solid pharmaceuticals sales offset a slide in its Covid vaccine business.
The company also lifted its 2022 earnings forecast by around 5 cents per share, to between $10.70 and $10.75 per share, with adjusted operational sales growth of between 6.7% and 7.2%, up from last month’s forecast of between 6.5% and 7.5%.
