Becton Dickinson to Buy CareFusion in $12.2 Billion Deal

Becton Dickinson & Co. (BD) has agreed to buy CareFusion Corp. in a $12.2 billion deal designed to provide a full range of medical products to hospitals, which are under pressure to cut costs and improve quality.

BD, which is based in Franklin Lakes, N.J., will pay $58 in cash and stock for each share of San Diego, Calif.-based CareFusion, based on Becton’s closing share price on Friday Oct. 3.

The planned acquisition, which is expected to close in the first half of next year, reflects how medical-equipment makers are trying to adapt to major changes in the way hospitals do business. BD and CareFusion make products including catheters, tubes and pumps that hospitals use to deliver medicines to patients. The two companies also have been trying to help hospitals manage their drug use to eliminate waste and errors.

The merged company will be the leader in the medication management sector, offering a “one-stop-shop” option for hospitals looking to improve efficiency, said Vijay Kumar, an analyst with ISI Group LLC in New York, N.Y., in a note to clients. BD will also be able to expand sales of CareFusion’s products in international markets, which now make up only 22 percent sales, he said.

By combining, the companies hope to be able to provide a fuller range of supplies, and also the tools medical facilities need to cope with health insurers, who are pressing them to curb spending and provide better, more cost-effective care.

“With the targeted cost savings we have identified and the growth opportunities we see in bringing CareFusion products to more patients and healthcare workers around the world, we expect this transaction to create meaningful value for our shareholders, customers, employees and other stakeholders,” said BD CEO Vincent Forlenza.

“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,” said Kieran T. Gallahue, CEO of CareFusion. “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.”