NEW YORK
J&J claims Boston Scientific Corp. owes it that amount, in damages and interest, for a broken contract in a case that went to trial Thursday in federal court in New York. J&J alleges that Guidant violated their merger agreement to pursue a more lucrative offer by Boston Scientific.
"What J&J is trying to do here is hold Guidant accountable for its willful breach," Harold Weinberger, J&J's lead attorney, said in his opening statement.
The suit threatens Boston Scientific, which has a market capitalization of $17.1 billion, with additional costs tied to an acquisition that has been called one of the worst in history. The company, which took on $10 billion in debt to buy Guidant, wrote down $2.7 billion tied to the deal in 2008. Boston Scientific shares have lost 40 percent since it took over the devicemaker.
J&J's damages from the failed transaction are $4.35 billion plus interest, for a total of $7.2 billion, Weinberger told U.S. District Judge Richard Sullivan, who is hearing the trial without a jury.
William Ohlemeyer, a lawyer for Guidant, argued that the company didn't violate the agreement with J&J and that the world's biggest seller of health care products is better off without Guidant. The deal "would have resulted in a multibillion-dollar loss for J&J," he told Sullivan.
The first witness, former J&J Chief Executive William Weldon, testified that he didn't believe his company came out ahead by losing the acquisition opportunity.
"I think that if J&J had acquired Guidant at the price we offered, it would have been a substantial asset to J&J," he said.
