Johnson & Johnson has sued Boston Scientific Corp. and Abbott Laboratories Inc., seeking at least $5.5 billion in damages related to J&J's failed bid for medical device maker Guidant Corp.
Lawyers for J&J filed the suit in U.S. District Court in New York, according to court papers filed on Monday.
The lawsuit charges that Guidant leaked confidential information to Abbott, which it claims was a material breach of the terms of Guidant's merger agreement with J&J and ultimately led to Boston Scientific winning the battle to acquire Guidant for $27 billion.
Guidant paid J&J a termination fee of $705 million to walk away from its deal with the diversified health care company.
We find it curious that J&J has chosen to sue eight months after Boston Scientific entered into a definitive agreement with Guidant and five months after the transaction closed, said Boston Scientific spokesman Paul Donovan.
Throughout this process, we complied with all the terms of the J&J/Guidant merger agreement. We believe the suit is meritless and we expect to demonstrate that in court.
Abbott spokeswoman Melissa Brotz also called the lawsuit without merit.
Johnson & Johnson confirmed the suit had been filed alleging a breach of its merger agreement with Guidant.
Boston Scientific ultimately outbid J&J in a battle to gain Guidant's position in the lucrative market for devices that manage heart rhythms. As part of the deal, Abbott agreed to buy Guidant's vascular intervention and endovascular businesses.
According to the suit, pending closure of the merger agreement with J&J, Guidant was prohibited from soliciting alternative offers and had limited ability to respond to an unsolicited bid from another party and was prohibited from providing confidential business information to any other company unless that company was making an unsolicited takeover proposal.
The suit accuses Guidant of violating those provisions by providing Abbott with confidential business information to determine whether Abbott would be willing to enter into a pre- packaged divestiture agreement with Boston Scientific.
The suit asks the court to find that Boston Scientific and Abbott intentionally interfered with, and induced Guidant to breach, the merger agreement.