The battle between Johnson & Johnson and Boston Scientific to acquire Guidant is still heating up. However, regardless of the outcome, the financing strategies used by Boston Scientific might open new frontiers for M&A. Most significantly, the offer from Boston Scientific includes a loan commitment from fellow US medical products company Abbott Laboratories, which is also on board to buy certain Guidant assets should the Boston Scientific bid be successful.
This is the first time corporate-to-corporate lending – not in the form of vendor financing – has been a critical element of a major acquisition bid, and could offer a new financing strategy to further M&A deals.
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