Johnson & Johnson Receives U.S. Regulatory Clearance For Synthes Acquisition; Closing Date For Transaction Set

NEW BRUNSWICK, N.J., June 12, 2012 /PRNewswire/ -- Johnson & Johnson (NYSE: JNJ) today announced that it has received U.S. regulatory clearance for its proposed acquisition of Synthes, Inc. This completes all regulatory approvals required to close the transaction. Johnson & Johnson expects to close the transaction with Synthes on June 14, 2012, subject to the satisfaction of customary closing conditions on that date, for a total purchase price of approximately $19.7 billion in cash and stock.

Based on a June 14, 2012 closing date, each outstanding share of Synthes common stock will be converted into the right to receive CHF 55.65 in cash and 1.7170 shares of Johnson & Johnson common stock (subject to the payment of cash in lieu of fractional shares). The exchange ratio was calculated based on the average of the volume weighted average trading prices of Johnson & Johnson common stock on the New York Stock Exchange (NYSE) on each of the 10 consecutive trading days ending two trading days prior to the effective time of the merger, as converted into CHF on each day during this valuation period (beginning May 30, 2012 and ending, June 12, 2012). Further information regarding closing instructions for Synthes stockholders can be found on www.investor.jnj.com or www.Synthes.com.

The European Commission granted its antitrust approval for the transaction on April 19, 2012.   On June 11, 2012, the Federal Trade Commission (FTC) granted early termination of the requisite waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The FTC also voted to accept a proposed consent order regarding the acquisition which requires Johnson & Johnson to divest to an FTC-approved buyer certain rights and assets related to its DePuy trauma business.  As previously announced, DePuy Orthopaedics, Inc., a wholly owned subsidiary of Johnson & Johnson, has entered into an agreement to divest its trauma business to Biomet, Inc. The divestiture is expected to close in the second quarter.

The Company has also commenced several steps to finance the transaction in an efficient manner to enhance shareholder value.  Janssen Pharmaceutical, a wholly owned Irish subsidiary of Johnson & Johnson, has entered into accelerated share repurchase (ASR) agreements with Goldman, Sachs & Co. and JPMorgan Chase Bank, N.A. to purchase a combined total of 203.7 million shares of Johnson & Johnson common stock for an initial purchase price of $12.9 billion. Under the ASR agreements Janssen Pharmaceutical will purchase shares of Johnson & Johnson common stock that the banks will have borrowed from stock lenders, and during the term of the ASR agreements the banks are expected to purchase approximately $12.9 billion of shares in the open market to return to those stock lenders. The shares purchased under the ASR agreements, together with cash on hand from Janssen Pharmaceutical, will be used by Janssen Pharmaceutical to provide the merger consideration for the purchase of Synthes.  No third party debt is expected to be incurred in connection with the acquisition. The ASR agreements are subject to terms customary for similar agreements, including adjustments upon the occurrence of certain events under which the ASR agreements may be extended or canceled. Further information regarding the ASR agreements can be found in the Company's related Form 8-K filing.

Based on the financial structure indicated above, the acquisition is anticipated to be accretive to 2012 adjusted earnings per share* by approximately $0.03 - $0.05.  Johnson & Johnson had previously disclosed in its S-4 filing that the acquisition was anticipated to be dilutive to earnings per share by $0.22, based on 2010 financial information.  The current estimate reflects a mid-year 2012 closing date as well as current sales estimates for the combined orthopaedics business.  In addition, Johnson & Johnson expects to record estimated after-tax special items for the balance of 2012 consisting of charges of approximately $1.1 billion related to the acquisition, including restructuring and integration costs, inventory step-up and currency adjustments.   In 2013, the first full year of the combined businesses, the transaction is anticipated to be accretive to adjusted earnings per share* by $0.10 - $0.15.  Additional information on the transaction, including earnings guidance for 2012, will be shared during Johnson & Johnson's next quarterly earnings analyst conference call on July 17, 2012.  Certain risk factors on the financial structure and impact of the transaction, as well as certain updated information with respect to the Swiss tax consequences of the transaction, are discussed in the Note to Investors and Media section below and investors are encouraged to read that information carefully.    

About Johnson & Johnson

Caring for the world, one person at a time, inspires and unites the people of Johnson & Johnson. We embrace research and science - bringing innovative ideas, products and services to advance the health and well-being of people. Our approximately 117,000 employees at more than 250 Johnson & Johnson operating companies work with partners in health care to touch the lives of over a billion people every day, throughout the world.

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