On April 28, Abbott Laboratories (NYSE: ABT) announced the acquisition of St. Jude Medical, Inc. (NYSE: STJ) for $82.50 per share.

J.P. Morgan’s Michael Weinstein downgraded the rating on St. Jude Medical from Overweight to Neutral, while raising the price target from $66.00 to $82.50.

The Deal

St. Jude Medical’s shareholders will receive $46.75 in cash and 0.8708 Abbot Laboratories’ shares for every share held by them, based on the latter company’s current share price and representing a 33 percent premium to the former’s closing price on April 27.

The deal has been approved by the boards of both companies and is expected to close in 4Q16.

Competing Bid Unlikely

“In our view, the only other potential suitor for St. Jude with the strategic and financial capabilities would be Johnson & Johnson (NYSE: JNJ), which we view as highly unlikely,” Weinstein stated.

Weinstein pointed out that Johnson & Johnson would run the risk of facing significant anti-trust issues associated with St. Jude Medical’s EP business, which is the latter company’s most attractive asset.

“Combined the two companies control more than 70 percent of the EP market and without that business, it would be hard for J&J to justify paying a premium to what Abbott has announced today,” the J.P. Morgan report said.