Business & Finance
The $25.4 billion takeover of Guidant Corp. by healthcare products giant Johnson & Johnson appeared headed for a potentially unpleasant legal battle, if not collapse. The parties agreed to the deal 10 months ago, but Johnson & Johnson (J&J) warned Wednesday that it might back out because of troubles that Guidant's principal products, heart pacemakers and defibrillators, have encountered. Despite sweeping recalls and a regulatory investigation, Guidant executives said their company's fundamentals are solid, its growth prospects are good, and J&J is legally bound to follow through with the deal. Analysts, however, speculated that Guidant could end up remaining independent and that J&J might turn its attention to Guidant's rival, St. Jude Medical Inc., if it is committed to further diversification. J&J is based in New Brunswick, N.J.; Guidant in Indianapolis.
Nissan Motor Co. refused to comment on a published report that the relocation of its North American headquarters is about to be announced. The Los Angeles Times, citing unidentified "company insiders," said the move would be from Gardena, Calif., to a newly leased facility 20 miles west of Nashville, Tenn. Nissan has an assembly plant at nearby Smyrna, Tenn. In the process, Gardena would lose about 1,300 jobs, the report said. Nissan's chief executive already has ordered that its world headquarters be moved from Tokyo to a cheaper site in Yokohama, Japan.
Pilkington PLC, a leading glassmaker and presumed take-over target, rejected a $3.5 billion offer from one of its major shareholders. A statement called the bid from Nippon Sheet Glass of Japan "materially short of a price ... the board is prepared to recommend" to investors. Pilkington is based in St. Helens, England, where Nippon has a subsidiary.
Novell Inc., a maker of business software, said it will lay off about 600 employees as part of a restructuring effort. The Waltham, Mass., company said it wants to concentrate more on its core businesses in the Linux and open-source markets while exploring strategic options for Celerant, its consulting unit.