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J&J to Buy Conor for $1.4 Billion

The all-cash merger gives Johnson & Johnson technology used in artery-narrowing treatment.

Health care products maker

Johnson & Johnson

(JNJ) - Get Johnson & Johnson (JNJ) Report

said late Thursday that it will buy

Conor Medsystems


for approximately $1.4 billion.

The acquisition of cardiac stent maker Conor will give J&J's Cordis medical-device business the CoStar Stent technology used in treatment for narrowing arteries and potentially the treatment of coronary-artery disease.

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The CoStar Stent is currently sold outside the U.S., and enrollment in its U.S. pivotal clinical trial has been completed, according to J&J.

Under the terms of the all-cash merger, stockholders of Menlo Park, Calif.-based Conor will receive $33.50 for each outstanding Conor share. The $1.4 billion estimated value of the transaction is based on Conor's 42.7 million shares outstanding, net of estimated cash on hand at the time of closing.

"With Conor Medsystems, we are positioned to lead the development of next-generation technologies aimed at advancing the standard of care in the treatment of coronary artery disease," said Nicholas Valeriani, J&J worldwide chairman of cardiovascular devices and diagnostics.

Conor CEO Dr. Frank Litvack said that "Cordis, which created the drug-eluting stent category, is the ideal partner" to furthur the company's strong technology portfolio, and to "accelerate the adoption of this important technology."

The boards of directors of the two companies have approved the transaction, which is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and Conor stockholder approval.

The deal is expected to close in the first quarter of 2007.

New Brunswick, N.J.-based J&J expects to take a one-time, after-tax charge of about $600 million for R&D expenses upon the close of the deal, which J&J expects to "modestly" reduce EPS in 2007.

Shares of J&J closed the regular session off a penny to $66.53; after hours they lost 13 cents. Conor shares gained 47 cents to $27.52.