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Economy

San Diego's CareFusion Bought By Rival For $12.2 Billion

New Jersey medical equipment maker Becton Dickinson and Co. said it will pay $12.2 billion for rival San Diego-based CareFusion, providing a combination that will focus on medication systems for hospitals and pharmacies.

The companies announced Sunday that BD will pay $58 for each share of CareFusion. The deal, expected to close in the first half of 2015, will give BD investors a 92 percent stake in the new company.

The boards of both companies unanimously approved the agreement, according to a news release put out by the businesses.

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BD said it remains committed to having an "active presence" in San Diego, where CareFusion is headquartered. CareFusion will be part of BD's medical segment, according to the news release.

The merger is the latest example of consolidation within the medical sector, where drug and device makers are turning to acquisitions to boost sales and cut costs. BD, based in Franklin Lakes, says the merger should result in $250 million in savings by 2018.

Both companies have focused recent development efforts on technology to reduce medication errors and other patient safety problems.

In a statement, Vincent A. Forlenza, BD’s chairman, CEO and president, said:

“BD’s acquisition of CareFusion allows us to align our highly complementary technologies and products to address unmet needs in the growing $20 billion global medication management industry, which leverages BD’s world-wide infrastructure. It accelerates BD’s transition from a product-focused company to a customer-centric provider of innovative healthcare solutions with leading scale across the medication management value chain and expanded solutions for patient safety."

CareFusion's chairman and CEO, Kieran T. Gallahue, said about the purchase:

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“As part of BD, we see new growth opportunities for our products in global markets, new value we can create for our customers and new opportunities for our employees as part of what will become one of the largest, global leaders in med-tech. The transaction delivers attractive value for CareFusion shareholders, and represents a powerful endorsement of our strong positions in medication management, informatics across our device platforms and leading products to help improve the effectiveness of acute-care procedures.”