NEW YORK (TheStreet) -- Boston Scientific Corp. (BSX) could have to pay excess of $5 billion in damages to Johnson & Johnson (JNJ) relating to a nine-year-old battle to acquire the device maker Guidant, depending on the outcome of a trial set to begin in New York on Thursday, Reuters reports.
A federal judge will decide if Guidant, through its successor, Boston Scientific, a medical device maker, should be held responsible for breaching its merger contract with Johnson & Johnson, Reuters said.
In 2004 Johnson & Johnson and Guidant made a deal to merge at a price of $21.5 billion, which included a no-solicitation clause that was intended to keep Guidant from seeking out other potential offers, Reuters added.
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Before the Johnson & Johnson deal closed, Boston Scientific stepped in with a $25 billion offer, and said it would sell assets to Abbott Laboratories (ABT) , an arrangement Johnson & Johnson had also made, Reuters noted.
Johnson & Johnson believes Guidant provided due diligence to Abbot as it considered the Boston Scientific offer. Court papers show that Boston Scientific is planning to argue Guidant didn't knowingly violate the agreement, Reuters said.
Separately, TheStreet Ratings team rates BOSTON SCIENTIFIC CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation: