8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

     Date of report (Date of earliest event reported) November 16, 2005

IMS HEALTH INCORPORATED

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

001-14049	06-1506026
(Commission File Number)	(IRS Employer Identification No.)
1499 Post Road, Fairfield, Connecticut	06824
(Address of Principal Executive Offices)	(Zip Code)

(203) 319-4700

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 1.02. TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
	Item 8.01. OTHER EVENTS.
	Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
SIGNATURE
EXHIBIT INDEX
EX-10.1: LETTER AGREEMENT
EX-99.1: PRESS RELEASE

Item 1.02. TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.

On November 16, 2005, IMS Health Incorporated (“IMS”), VNU N.V. (“VNU”) and Isaac Acquisition Corp. (“Merger Sub”) entered into a letter agreement that terminated the Agreement and Plan of Merger, dated as of July 10, 2005, among such parties.

The proposed merger was announced on July 11, 2005 and was expected to close in the first quarter of 2006, subject to approval by the shareholders of both companies. Consummation of the merger would have resulted in IMS surviving as a wholly-owned subsidiary of VNU. Subsequent to the announcement of the proposed merger, several of VNU’s major shareholders stated that they did not support a merger of IMS and VNU and would vote against its approval.

Pursuant to the letter agreement, VNU has agreed to reimburse IMS $15 million for its actual out-of-pocket costs, and VNU will pay an additional $45 million to IMS should VNU itself be acquired in the next 12 months. IMS has agreed to return the $15 million payment to VNU if IMS is acquired in the next 12 months.

The description of the letter agreement contained in this Item 1.02 does not purport to be complete and is qualified in its entirety by reference to the letter agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 8.01. OTHER EVENTS.

On November 17, 2005, IMS issued a press release announcing the termination of the proposed merger of IMS and VNU.

This press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(a) Financial Statements of Businesses Acquired.

None

(b) Pro Forma Financial Information.

None

(c) Exhibits.

     The following exhibits are furnished as part of this report:

Exhibit Number	Description
10.1	Letter Agreement, dated November 16, 2005, among IMS Health Incorporated, VNU N.V. and Isaac Acquisition Corp.
99.1	Press Release

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	IMS HEALTH INCORPORATED
	By:	/s/ Robert H. Steinfeld
	Name:	Robert H. Steinfeld
	Title:	Senior Vice President, General Counsel and Corporate Secretary
Date: November 17, 2005

EXHIBIT INDEX

Exhibit Number	Description
10.1	Letter Agreement, dated November 16, 2005, among IMS Health Incorporated, VNU N.V. and Isaac Acquisition Corp.
99.1	Press Release

EX-10.1

Exhibit 10.1

IMS HEALTH INCORPORATED
1499 Post Road
Fairfield, CT 06824

November 16, 2005

VNU N.V. and Isaac Acquisition Corp.
c/o VNU N.V.
770 Broadway
New York, NY 10003
Attention: Chief Legal Officer

Ladies and Gentlemen,

          We refer to the Agreement and Plan of Merger, dated as of July 10, 2005 (the Merger Agreement”), among you and us. Capitalized terms used in this letter agreement but not defined herein are used as defined in the Merger Agreement.

          In consideration of the mutual covenants and agreements contained herein, you and we have agreed and hereby confirm as follows:

1. Termination. The Merger Agreement is hereby terminated in accordance with Section 8.1(a) thereof and the Merger contemplated by the Merger Agreement is hereby abandoned.

2. Representations. (a) The Company hereby represents and warrants to Parent that there are no Company Acquisition Proposals that have been made known to the Company and remain pending as of the date hereof, and Parent hereby represents and warrants to the Company that there are no Parent Acquisition Proposals that have been made known to Parent and remain pending as of the date hereof.

(b) Each of the Company and Parent hereby represents that the execution, delivery and performance of this letter agreement by it has been duly and validly authorized by all necessary corporate action and no other corporate proceedings by or on the part of it are necessary to authorize this letter agreement or to perform its obligations hereunder; this letter agreement has been duly and validly executed and delivered by it, and assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms hereof, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights generally and general equitable principles (whether considered in a proceeding in equity or at Law).

3. Fees and Expenses. Except as expressly provided in this letter agreement, each of the Company and Parent shall pay all of the fees, costs and expenses that it has incurred in

connection with the negotiation, execution and delivery of the Merger Agreement and this letter agreement and all acts taken and documents prepared in connection therewith. Upon execution of this letter agreement, Parent shall pay the Company $15 million in cash, payable by wire transfer of same day funds to an account designated by the Company in writing, as reimbursement for the Company’s out-of-pocket fees and expenses incurred in connection with the Merger Agreement and this letter agreement.

4. Company Tail Fee. (a) If a Company Payment Trigger occurs, then the Company shall pay a Company Tail Fee to Parent, payable by wire transfer of same day funds to an account designated by Parent in writing, on the date the Company Payment Trigger shall have occurred. For purposes of this letter agreement, (i) a “Company Payment Trigger” shall be deemed to have occurred if: (x) within 12 months after the date of this letter agreement, a Company Transformation shall have been consummated, (y) one or more definitive agreements shall each have been entered into within 12 months after the date of this letter agreement (collectively, “Company Transformation Agreements”) for transactions which, individually or in the aggregate, would constitute a Company Transformation, and subsequently such Company Transformation shall have been consummated or (z) a Company Transformation Agreement satisfying clause (y) above is terminated or abandoned and at the time of such termination or abandonment a proposal for another Company Transformation has been made to the Board of Directors of the Company or publicly announced and remains pending (a “Topping Company Transformation”) and such Topping Company Transformation is consummated, (ii) “Company Transformation” means (x) the acquisition by any person or group (as used in this letter agreement, “group” has the meaning contemplated under Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder) of Company equity securities representing a 50% or greater economic or voting interest in all of the Company’s outstanding equity securities or (y) the sale in one or more transactions outside the ordinary course of business of assets that constitute 50% or more of the consolidated assets of the Company as of the date of this letter agreement, whether sold by the Company or by entities spun off directly or indirectly to shareholders of the Company, and treating any entity as having sold all of its assets if any person or group acquires a 50% or greater economic or voting interest in all of the outstanding equity securities of that entity; provided that in connection with any such sale 50% or greater of the proceeds of such sale are paid to the shareholders of the Company or such spun off entity, as applicable, or the Company or such spun off entity announces a plan (which is not withdrawn prior to such sale) or effectuates a plan to return 50% or greater of the proceeds of such sale to the shareholders of the Company or such spun off entity, as applicable, through a share repurchase program or by dividends or other distributions and (iii) “Company Tail Fee” means $15 million. For purposes of this Section 4(a), “voting interest” means voting power to elect directors generally. In no event shall the Company ever be obligated to pay more than one Company Tail Fee.

(b) The Company shall not spin off any subsidiary to its shareholders unless prior to the spinoff such subsidiary agrees in writing to be jointly and severally liable for the obligations of the Company hereunder.

5. Parent Tail Fee. (a) If a Parent Payment Trigger occurs, then Parent shall pay a Parent Tail Fee to the Company, payable by wire transfer of same day funds to an account designated by the Company in writing, on the date the Parent Payment Trigger shall have occurred. For purposes of this letter agreement, (i) a “Parent Payment Trigger” shall be

deemed to have occurred if: (x) within 12 months after the date of this letter agreement, a Parent Transformation shall have been consummated, (y) one or more definitive agreements shall each have been entered into within 12 months after the date of this letter agreement (collectively, “Parent Transformation Agreements”) for transactions which, individually or in the aggregate, would constitute a Parent Transformation and subsequently such Parent Transformation shall have been consummated or (z) a Parent Transformation Agreement satisfying clause (y) above is terminated or abandoned and at the time of such termination or abandonment a proposal for another Parent Transformation has been made to the Supervisory Board of Parent or publicly announced and remains pending (a “Topping Parent Transformation”) and such Topping Parent Transformation is consummated, (ii) “Parent Transformation” means (x) the acquisition by any person or group of Parent equity securities representing a 50% or greater economic or voting interest in all of Parent’s outstanding equity securities (other than an acquisition of preference shares in Parent by Stichting V.N.U.) or (y) the sale in one or more transactions outside the ordinary course of business of assets that constitute 50% or more of the consolidated assets of Parent as of the date of this letter agreement (after giving pro forma effect to any extraordinary return of capital to Parent shareholders announced or publicly disclosed at the time of the announcement of the execution of this letter agreement, to the extent such return is actually effected or continues to be planned to be effected), whether sold by Parent or by entities spun off directly or indirectly to shareholders of Parent, and treating any entity as having sold all of its assets if any person or group acquires a 50% or greater economic or voting interest in all of the outstanding equity securities of that entity; provided that in connection with any such sale 50% or greater of the proceeds of such sale are paid to the shareholders of Parent or such spun off entity, as applicable, or Parent or such spun off entity announces a plan (which is not withdrawn prior to such sale) or effectuates a plan to return 50% or greater of the proceeds of such sale to the shareholders of Parent or such spun off entity, as applicable, through a share repurchase program or by dividends or other distributions and (iii) “Parent Tail Fee” means $45 million. For purposes of this Section 5(a), “voting interest” means voting power to elect members of the supervisory board or the executive board generally. In no event shall Parent ever be obligated to pay more than one Parent Tail Fee.

(b) Parent shall not spin off any subsidiary to its shareholders unless prior to the spinoff such subsidiary agrees in writing to be jointly and severally liable for the obligations of Parent hereunder.

6. Releases. (a) Parent, on behalf of itself and its predecessors, successors, assigns, subsidiaries and affiliates and any of the present and former officers, directors and employees of the foregoing, in their capacity as such, hereby release and discharge the Company and its subsidiaries and affiliates, and the present and former directors, officers, employees, representatives, agents, advisors (including financial advisors), and attorneys of the foregoing, of and from any and all claims, actions, causes of action, suits, rights, damages, liabilities and demands that each of them ever had, now has or may hereafter have, in law or in equity, known or unknown, that are based on, arise from or otherwise relate directly or indirectly to any aspect of the Merger Agreement, excluding claims for the enforcement of (x) this letter agreement and (y) obligations under the Confidentiality Agreement.

(b) The Company, on behalf of itself and its predecessors, successors, assigns, subsidiaries and affiliates and any of the present and former officers, directors and

employees of the foregoing, in their capacity as such, hereby release and discharge Parent and its subsidiaries and affiliates, and the present and former directors, officers, employees, representatives, agents, advisors (including financial advisors), and attorneys of the foregoing, of and from any and all claims, actions, causes of action, suits, rights, damages, liabilities and demands that each of them ever had, now has or may hereafter have, in law or in equity, known or unknown, that are based on, arise from or otherwise relate directly or indirectly to any aspect of the Merger Agreement, excluding claims for the enforcement of (x) this letter agreement and (y) obligations under the Confidentiality Agreement.

7. Miscellaneous. (a) The provisions of the Confidentiality Agreement shall survive and remain in full force and effect in accordance with its terms.

(b) The provisions of Sections 9.10 (Jurisdiction) and 9.12 (Waiver of Jury Trial) of the Merger Agreement are incorporated herein by reference as though they were set forth in their entirety herein, except that any references to the Agreement in those Sections will be deemed to instead be references to this letter agreement and any references to the transactions contemplated by the Agreement in those Sections will be deemed to instead be references to the transactions contemplated hereby.

(c) Each of the Company and Parent agrees that if either party commences a suit to enforce the provisions of this letter agreement which suit results in a judgment against the other party for the payment of damages or injunctive relief, the losing party shall pay to the other party its reasonable costs and expenses (including reasonable attorneys’ fees) in connection with such suit, together with interest on the amount due from each date of payment of any such fees and expenses until the date of the payment under this paragraph at the prime rate of Citibank, N.A. in effect on the date of such judgment.

(d) This letter agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware.

(e) This letter agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

(f) Each of the Company and Parent agrees to execute such additional documents and take such additional actions as may be reasonably necessary or desirable to achieve the complete termination and release of the Merger Agreement and the obligations thereunder contemplated hereby.

(g) This letter agreement constitutes the entire agreement among the Company and Parent with respect to the subject matter hereof and supersedes all prior agreements (including Section 8.2(a) of the Merger Agreement) and understandings, both written and oral, among the Company and Parent, or any of them, with respect to the subject matter hereof.

(h) This letter agreement shall be binding upon and inure solely to the benefit of each of the Company and Parent, and nothing in this letter agreement, express or implied, is intended to or shall confer upon any other person any rights, benefits or remedies of any

nature whatsoever under or by reason of this letter agreement, other than with respect to the provisions of Section 6 which shall inure to the benefit of the persons or entities benefiting therefrom who are expressly intended to be third-party beneficiaries thereof.

(i) If any term or other provision of this letter agreement is invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other conditions and provisions of this letter agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this letter agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

*          *          *          *

          If the foregoing is in accordance with your understanding, please execute a counterpart of this letter agreement, whereupon it shall, as of the date first above written, become the binding and enforceable agreement of the parties who have signed it.

IMS HEALTH INCORPORATED
By:	/s/ Robert H. Steinfeld
	Name: Robert H. Steinfeld
	Title: Senior Vice President; General Counsel
VNU N.V.
By:	/s/ Earl H. Doppelt
	Name: Earl H. Doppelt
	Title: Authorised Person
ISAAC ACQUISITION CORP.
By:	/s/ Earl H. Doppelt
	Name: Earl H. Doppelt
	Title: Chief Executive Officer and President

EX-99.1

Exhibit 99.1

		News
		For Immediate Release
Contacts:	Bill Hughes	Darcie Peck
	Corporate Communications	Investor Relations
	(203) 319-4732	(203) 319-4766
	bhughes@imshealth.com	dpeck@imshealth.com

IMS HEALTH COMMENTS ON TERMINATION OF
PLANNED MERGER WITH VNU

FAIRFIELD, CT, Nov. 17, 2005 - IMS Health (NYSE: RX), the world’s leading provider of market intelligence to the pharmaceutical and healthcare industries, today announced that, by mutual agreement, the planned merger with VNU NV (ASE: VNU) has been terminated. The proposed merger was announced on July 11, 2005, and was expected to close in the first quarter of 2006, subject to the approval by the shareholders of both companies.

     “Several of VNU’s major shareholders have made it clear, for a variety of reasons, they did not want to pursue any large merger at this time,” said David R. Carlucci, CEO and president, IMS Health. “While we regret that the merger with VNU will not happen, our business is strong. We are executing on our strategy, and will continue to look for ways to provide clients with even more comprehensive information and analysis. Further, to provide additional insights on consumer behavior, we’re pleased to have gained agreement with VNU to continue working together to develop and pursue the many joint revenue opportunities that came out of our integration planning efforts.

     “IMS is focused on building value for shareholders and we remain comfortable with our full-year guidance of 10 to 12 percent constant-dollar revenue growth, and full-year, adjusted earnings per share of $1.32 to $1.35,” Carlucci said.

     VNU has agreed to reimburse IMS $15 million for its actual out-of-pocket costs related to merger planning, and an additional $45 million should VNU itself be acquired in the next 12 months. For its part, IMS has agreed to return the $15 million payment to VNU if IMS is acquired in the next 12 months.

Conference Call and Webcast Details

     IMS will host a conference call at 10:00 am U.S. EST to discuss the decision not to pursue a merger with VNU. To participate, please dial 1-877- 349-8780 (United States and Canada) and 1-706-634-0463 (outside of the United States and Canada) approximately 15 minutes before the scheduled start of the call. The conference call also will be accessible live via Webcast at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=67124&eventID=1166000

     A replay of the conference call will be available online on the Investor Relations section of the IMS website and via telephone by dialing 1-800-633-8284, or 1-402-977-9140 (outside the United States and Canada), and entering access code 21269222.

About IMS

     Operating in more than 100 countries, IMS Health is the world’s leading provider of market intelligence to the pharmaceutical and healthcare industries. With $1.6 billion in 2004 revenue and more than 50 years of industry experience, IMS offers leading-edge business intelligence products and services that are integral to clients’ day-to-day operations, including portfolio optimization capabilities; launch and brand management solutions; sales force effectiveness innovations; managed care and over-the-counter offerings; and consulting and services solutions that improve ROI and the delivery of quality healthcare worldwide. Additional information is available at http://www.imshealth.com.

Forward-Looking Statements

This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although IMS Health believes the expectations contained in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove correct. This information may involve risks and uncertainties that could cause actual results of IMS Health to differ materially from the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to (i) the risks associated with operating on a global basis, including fluctuations in the value of foreign currencies relative to the U.S. dollar, and the ability to successfully hedge such risks, (ii) to the extent IMS Health seeks growth through acquisitions and joint ventures, the ability to identify, consummate and integrate acquisitions and joint ventures on satisfactory terms, (iii) the ability to develop new or advanced technologies and systems for its businesses on time and on a cost-effective basis, (iv) regulatory, legislative and enforcement initiatives, particularly in the areas of medical privacy and tax, (v) to the extent unforeseen cash needs arise, the ability to obtain financing on favorable terms, and (vi) deterioration in economic conditions, particularly in the pharmaceutical, healthcare or other industries in which IMS Health’s customers operate. Additional information on factors that may affect the business and financial results of the Company can be found in filings of the Company made from time to time with the Securities and Exchange Commission.

Regulation G

IMS guides to adjusted results. Adjusted results are those used by management for the purposes of global business decision-making, including developing budgets and managing expenditures. Adjusted results exclude certain U.S. GAAP measures to the extent that management believes exclusion will facilitate comparisons across periods and more clearly indicate trends. Although IMS discloses adjusted results in order to give a full picture to investors of its business as seen by management, these adjusted results are not prepared specifically for investors and are not a replacement for the more comprehensive information for investors included in IMS Health’s U.S. GAAP results. The method IMS uses to prepare adjusted results differs in significant respects from U.S. GAAP and is likely to differ from the methods used by other companies.

IMS expects SEC-reported full-year diluted earnings per share (“EPS”) to differ from adjusted diluted EPS. For the first nine months of 2005, the SEC-reported diluted EPS was lower than adjusted diluted EPS. See IMS Health Earnings Release for Third-Quarter 2005 dated October 19, 2005 and available in the Investors section of the IMS website at www.imshealth.com. The difference was due to costs associated with the proposed merger of IMS and VNU, net gains from IMS Health’s investments, legal fees relating to the IRI litigation, phasing adjustments of foreign currency hedge gains, phasing adjustments relating to a tax benefit and a tax charge related to IMS Health’s repatriation transaction. By year-end, it is expected that the foreign currency hedge gain difference and the phasing adjustment for a tax benefit difference between SEC-reported and adjusted diluted EPS for the first nine months of 2005 will reverse, resulting in no difference in these items between SEC-reported and adjusted diluted EPS for the full year. Additional items that could cause full-year 2005 SEC-reported diluted EPS to differ from adjusted diluted EPS include, but are not limited to, costs associated with the proposed merger of IMS and VNU, IRI legal fees and gains or losses resulting from strategic actions with respect to IMS Health’s investments. In addition, the full-year SEC-reported and adjusted diluted EPS will differ due to the tax charge related to the company’s repatriation transaction. IMS is unable to predict at this time the occurrence or amount of these as well as other items that could cause full-year 2005 SEC-reported diluted EPS to differ from adjusted diluted EPS.

IMS Health’s revenue guidance is to constant-dollar revenue growth but SEC-reported revenue growth will include the effect of foreign currency fluctuations, which IMS cannot at this time reliably predict.

Statements relating to guidance are based on current expectations as of the date of this release. These statements are forward-looking, and actual results may differ materially. IMS does not undertake to update these targets in any way or for any reason prior to discussing actual results.