Item 2.01. Completion of Acquisition or Disposition of Assets.
On January 4, 2017, Abbott completed the acquisition of St. Jude Medical, Inc. (“
St. Jude Medical
”), pursuant to the Agreement and Plan of Merger, dated as of April 27, 2016 (the “
Merger Agreement
”), by and among Abbott, St. Jude Medical, Vault Merger Sub, Inc. and Vault Merger Sub, LLC. Abbott completed the acquisition of St. Jude Medical through two mergers: (1) first, Vault Merger Sub, Inc., a wholly owned subsidiary of Abbott, was merged with and into St. Jude Medical, with St. Jude Medical surviving the merger as a wholly owned subsidiary of Abbott (the “
First Merger
”), and (2) second and promptly after the First Merger, St. Jude Medical was merged with and into Vault Merger Sub, LLC, with Vault Merger Sub, LLC surviving the merger as a wholly owned subsidiary of Abbott and being renamed St. Jude Medical, LLC (“
SJM LLC
”) (the “
Second Merger
” and together with the First Merger, the “
Mergers
”).
In the First Merger, each share of St. Jude Medical common stock issued and outstanding immediately prior to the first effective time was automatically converted into the right to receive 0.8708 of an Abbott common share and $46.75 in cash, without interest (the “
Per Share Merger Consideration
”), with any fractional Abbott common shares to be settled in cash.
In connection with completion of the First Merger, vested options to purchase shares of St. Jude Medical common stock were deemed exercised pursuant to a cashless exercise and the net number of shares of St. Jude Medical common stock payable in respect thereto were converted into the right to receive the Per Share Merger Consideration, less applicable withholding taxes, with any fractional Abbott common shares to be settled in cash. In addition, unvested options and restricted stock units in respect of St. Jude Medical common stock were assumed by Abbott and converted into Abbott options and restricted stock units (as applicable) of substantially equivalent value, in each case in accordance with the terms of the Merger Agreement.
Based on the closing price of $39.36 for an Abbott common share on the New York Stock Exchange on January 4, 2017, the aggregate implied value of the consideration paid in connection with the Mergers was approximately $23.6 billion, including approximately $10 billion in Abbott common shares and approximately $13.6 billion in cash.
After giving effect to the issuance of Abbott common shares in connection with the Mergers, Abbott has approximately 1,726.2 million common shares outstanding.
The foregoing description of the Mergers and the Merger Agreement is not complete and is qualified in its entirety by reference to the Merger Agreement, which is filed as Exhibit 2.1 and is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On January 4, 2017, Abbott fully guaranteed the obligations of SJM LLC under that certain Amended and Restated Term Loan Agreement, dated as of January 4, 2017 (as further amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “
Amended and Restated Term Loan Agreement
”), among SJM LLC, the guarantors from time to time party thereto, the lenders from time to time party thereto, and Bank of America, N.A., as administrative agent, with an aggregate principal amount outstanding of approximately $2.3 billion, substantially on the terms set forth in the Amended and Restated Term Loan Agreement.
The borrowings under the Amended and Restated Term Loan Agreement will bear interest, at SJM LLC’s option, based on either a base rate or a Eurodollar rate, plus an applicable margin based on Abbott’s credit ratings. The Amended and Restated Term Loan Agreement contains representations and warranties and affirmative and negative covenants customary for
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