The Journal post-mortems Boston Scientific's successful bid for Guidant. Nothing in these has me rethinking my belief that the combined company will be either up for sale or reorganizing within 2 years:
Boston Scientific will borrow an estimated $9.6 billion to finance the deal -- and sustain four years or more of damaged earnings -- on its hunch that Guidant is the answer to its own deteriorating product line. While paying down all that debt, the company will have to integrate the largest merger in its 27-year history, revive Guidant's flagging market share, develop new products, and wrestle with any product-liability costs from Guidant's legal problems.Investors nonetheless have shown their confidence, keeping Boston Scientific's shares relatively stable during a tumultuous merger showdown. The combined company, with revenues of about $9 billion...
Debt. Target as Savior. Complex operations. Key target personnel leaving. Uncertain regulatory environment.
BTW - the shares that have been stable this year are already down 30% from the start of '04.