Guidant takeover won’t hit jobs

THE proposed €18 billion takeover of Guidant by Johnson & Johnson is not expected to impact on the creation of more than 1,300 new jobs planned independently by the companies in Cork and Clonmel.

Industry sources do not expect either project to be scrapped in the event of a successful takeover, but cautioned: “In a takeover situation you can never be too sure what cost savings will be identified. The Irish operations of these companies are set for fair growth and it would be a major surprise if something was to go awry,” a source familiar with the deal said.

Johnson & Johnson, the world’s biggest maker of medical devices, is in talks to buy Guidant Corp for €18bn and may reach an agreement in the next few days.

Johnson & Johnson was negotiating to pay $75 for each share of Guidant, the second-biggest maker of heart-rhythm products worldwide.

Buying Guidant would put Johnson & Johnson into the €6bn a year cardiac rhythm management market and add almost €3bn to its €31.6bn annual sales.

Indianapolis-based Guidant’s heart-stent business would strengthen Johnson & Johnson as a competitor to Boston Scientific Corp, the biggest maker of the tiny mesh tubes, which are used to prop open blood vessels. Guidant and Johnson & Johnson have extensive operations in Ireland and earlier this year both companies announced significant job creation initiatives.

Guidant established its Ardgeeha plant on the outskirts of Clonmel six years ago, where more than 1,000 people are employed.

In June, the company unveiled plans for a significant development which is expected to add an extra 1,000 people to the local workforce, with 500 new jobs in place within the next three years.

Johnson & Johnson’s subsidiary Centocor is to create 330 new jobs over the next five years at a new biopharmaceutical plant at Ringaskiddy, County Cork.

Centocor, a wholly-owned subsidiary of Johnson and Johnson, already has four companies in Ireland, employing more than 1,300 people.

Its Janssen plant in Cork employs 260 people; 95 people work at the Alza plant in Cashel, County Tipperary and 450 work at the Vistakon plant in Limerick. The DePuy plant at Ringaskiddy employs 515 more. A prize for Johnson & Johnson would be Guidant’s rapid-exchange stent-delivery system, which doctors say is one of the best on the market.

Guidant’s implantable defibrillators, which sense irregularities in the heart’s rhythm and send a shock when necessary to restore a normal heartbeat, are attractive for Johnson & Johnson because sales are growing at more than 20% a year.

The transaction would be almost twice as large as Johnson & Johnson’s previous biggest purchase, the $13bn acquisition of Alza Corp in 2001. At that time an Alza development in Cashel proceeded unimpeded.