Becton Dickinson to buy CareFusion for $12 billion in cash, stock

By Deena Beasley

(Reuters) - Medical equipment supplier Becton Dickinson & Co (BDX.N) has agreed to buy CareFusion Corp (CFN.N), a maker of infusion pumps and other medical devices, for $12.2 billion (7.64 billion pounds) in cash and stock, marking the latest multibillion-dollar healthcare sector deal.

Becton said on Sunday it would pay a total of $58.00 a share - $49.00 in cash and 0.0777 of a share of Becton Dickinson - for each share of CareFusion, representing a premium of 26 percent to the closing price on Oct. 3.

The acquisition, recommended by the boards of both companies, is aimed at combining the two U.S.-based companies' complementary products for preparing, administering and monitoring patient medications while also extending their geographical reach.

BD makes products to deliver and administer drugs, like disposable needles, syringes and IV (intravenous) catheters, while CareFusion makes products to store the drugs and to deliver them, such as infusion pumps.

A combined company "could improve patient safety plus reduce costs at the same time," said Vincent Forlenza, Becton Dickinson's chairman, chief executive officer and president in a telephone interview.

Cost-related healthcare reforms, including those mandated under President Barack Obama's Affordable Care Act, have spurred consolidation for U.S. health systems and hospitals, the main customer for both Becton Dickinson and CareFusion.

"This is an industry that from a customer perspective is consolidating," said Kieran Gallahue, CareFusion's chairman and CEO. "Healthcare systems around the globe are looking for companies that can bring greater scale to them - it is a way to drive down costs while improving safety at the same time."

Forlenza said Becton's geographic reach - around 60 percent of its sales are outside of the United States and 25 percent of sales are in emerging markets - offers a strong platform for products from CareFusion, which currently relies on the domestic market for 75 percent of its revenue.

Becton said the transaction is expected to provide double-digit earnings growth, on an adjusted basis, in the first full year, and will be accretive to net earnings in fiscal year 2018.

The deal, subject to regulatory and CareFusion shareholder approvals and customary closing conditions, is expected to close in the first half of next year.

At closing, the companies said Becton Dickinson shareholders will own around 92 percent of the combined company and CareFusion shareholders will own around 8 percent.

Healthcare companies have been merging at a record pace, with year-to-date activity topping $346 billion, compared to $212 billion in the year-ago period, Thomson Reuters data showed as of September.

Recent large deals have included AbbVie Inc's (ABBV.N) planned $54 billion acquisition of Shire Plc (SHP.L) and Medtronic Inc's (MDT.N) planned acquisition of Covidien Plc (COV.N) for $43 billion. AstraZeneca Plc (AZN.L), meanwhile, fended off a $118 billion takeover attempt by Pfizer Inc (PFE.N).

(Reporting By Deena Beasley; Editing by Chizu Nomiyama)