NEW BRUNSWICK, N.J. (AP) - Cardinal Health is offering to buy a unit of Johnson & Johnson that makes heart devices for approximately $1.94 billion.
NEW BRUNSWICK, N.J. (AP) — Cardinal Health is offering to buy a unit of Johnson & Johnson that makes heart devices for approximately $1.94 billion.
Johnson & Johnson's Cordis business, which is based in Fremont, California, had 2014 revenue of about $780 million. The U.S. is its biggest single market, but 70 percent of total sales come from outside the U.S. Cordis has operations in more than 50 countries, including China, Japan, Germany, Italy, France, the U.K. and Brazil.
Cardinal Health expects the proposed deal to add more than 20 cents per share to its fiscal 2017 adjusted earnings. This includes the cost of an incremental 7 cents to 8 cents per share of interest expense associated with financing it.
The acquisition is targeted to close toward the end of the year, if Johnson & Johnson accepts the offer.
The Cordis business will report to Don Casey, CEO of Cardinal Health's medical segment, once the acquisition is complete.
"This initiative is part of our ongoing disciplined portfolio management approach to focus on our most promising opportunities to help patients and drive growth," Gary Pruden, Worldwide Chairman of Johnson & Johnson's global surgery group, said in a statement.
Cardinal Health Inc. expects cost savings of more than $100 million annually by the end of fiscal 2018. The Dublin, Ohio-based company said Monday that it plans to finance the proposed deal with a combination of $1 billion in new senior unsecured notes and existing cash.
Johnson & Johnson is based in New Brunswick, New Jersey.