Shares of Boston Scientific Corporation BSX surged over 11 percent Wednesday following news that it settled a dispute with Johnson & Johnson JNJ over its acquisition of Guidant in 2006.
Johnson & Johnson had alleged that Guidant breached the merger agreement it had with Johnson & Johnson, and sought more than $7 billion in damages, according to Boston Scientific.
Johnson & Johnson agreed to permanently dismiss its action without acknowledgment of liability by Guidant in exchange for Boston Scientific paying Johnson & Johnson $600 million.
In a press release, Tim Pratt, Executive Vice President, Chief Administrative Officer, General Counsel and Secretary of Boston Scientific said, “We feel this settlement is in the best interests of the company and its shareholders. We are pleased to end this longstanding litigation between Guidant and Johnson & Johnson, and to continue focusing on delivering innovative products and solutions to physicians and patients.”
Boston Scientific reported that it will take a pre-tax litigation-related charge of approximately $600 million within its fourth quarter 2014 results as a recognized subsequent event.
Boston Scientific recently traded at $16.57, up 11.66 percent.
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