While reporting on the Delta-Northwest merger last spring, I interviewed merger-and-acquisition experts who cautioned that these deals usually don’t deliver the benefits that stakeholders expect.
That appears to be the case for another blockbuster merger with implications in the Twin Cities, according to The Deal magazine. The publication sets its hindsight on the 2005 purchase of Guidant Corp. by Boston Scientific.
Boston Scientific got into a bidding war with Johnson & Johnson for Guidant, which included major operations in the Twin Cities. In retrospect, The Deal concludes the $27 billion Boston Scientific paid was probably more than it should have.
The new company has struggled since then with product safety worries, executive turnover, heavy debt, downgrades and now the recession, the magazine writes. One analyst says: “They shot themselves in the foot by completely overpaying for Guidant.”