Johnson & Johnson (JNJ: Quote) announced that it has received U.S. regulatory clearance for its proposed acquisition of Synthes, Inc. The company said that the clearance completes all regulatory approvals required to close the transaction.
Johnson & Johnson said it expects to close the transaction with Synthes on June 14, 2012, subject to the satisfaction of customary closing conditions on that date, for a total purchase price of approximately $19.7 billion in cash and stock.
Janssen Pharmaceutical, a wholly owned Irish subsidiary of Johnson & Johnson, has entered into accelerated share repurchase or ASR agreements with Goldman, Sachs & Co. and JPMorgan Chase Bank, N.A. to purchase a combined total of 203.7 million shares of Johnson & Johnson common stock for an initial purchase price of $12.9 billion.
Under the ASR agreements, Janssen Pharmaceutical will purchase shares of Johnson & Johnson common stock that the banks will have borrowed from stock lenders, and during the term of the ASR agreements the banks are expected to purchase about $12.9 billion of shares in the open market to return to those stock lenders.
The acquisition is now anticipated to be accretive to 2012 adjusted earnings per share by approximately $0.03 - $0.05. Johnson & Johnson had previously disclosed in its S-4 filing that the acquisition was anticipated to be dilutive to earnings per share by $0.22, based on 2010 financial information. The current estimate reflects a mid-year 2012 closing date as well as current sales estimates for the combined orthopaedics business.
In addition, Johnson & Johnson noted that it expects to record estimated after-tax special items for the balance of 2012 consisting of charges of approximately $1.1 billion related to the acquisition, including restructuring and integration costs, inventory step-up and currency adjustments.
In 2013, the first full year of the combined businesses, the transaction is anticipated to be accretive to adjusted earnings per share by $0.10 - $0.15.
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by RTT Staff Writer
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