Acquisitions and Divestitures

3 Months Ended

Mar. 31, 2024

Business Combinations [Abstract]

Acquisitions and Divestitures

Acquisitions and divestitures

Subsequent to the fiscal first quarter of 2024, the Company announced that it has entered into a definitive agreement to acquire all outstanding shares of Shockwave Medical, Inc. (Shockwave) (Nasdaq: SWAV), a leading, first-to-market provider of innovative intravascular lithotripsy (IVL) technology for the treatment of calcified coronary artery disease (CAD) and peripheral artery disease (PAD), for $335.00 per share in cash, corresponding to an enterprise value of approximately $13.1 billion including cash acquired. The results of operations will be included in the MedTech segment as of the acquisition date. The closing of the transaction is expected to occur by mid–year 2024.

On March 7, 2024, the Company completed the acquisition of Ambrx Biopharma, Inc., (Ambrx), a clinical-stage biopharmaceutical company with a proprietary synthetic biology technology platform to design and develop next-generation antibody drug conjugates (ADCs), in an all-cash merger transaction for a total equity value of approximately $2.0 billion, or $1.8 billion net of cash acquired. The Company acquired all of the outstanding shares of Ambrx’s common stock for $28.00 per share through a merger of Ambrx with a subsidiary of the Company. The transaction was accounted for as a business combination and the results of operations were included in the Innovative Medicine segment as of the acquisition date. The fair value of the acquisition was allocated to assets acquired of $2.3 billion, primarily non-amortizable intangible assets, inclusive of purchased IPR&D, for $1.9 billion, goodwill for $0.3 billion and liabilities assumed of $0.5 billion, which includes deferred taxes of $0.4 billion. The preliminary purchase price allocation is subject to any subsequent valuation adjustments within the measurement period. A probability of success factor ranging from 40% to 70% was used in the fair value calculation to reflect inherent regulatory and commercial risk of the IPR&D. The discount rate applied was approximately 17%. The goodwill is primarily attributable to synergies expected to arise from the business acquisition and is not expected to be deductible for tax purposes. Acquisition related costs before tax for the fiscal first quarter of 2024 were not material.

Divestitures

In the fiscal first quarter of 2024, the Company completed the divestiture of Ponvory resulting in approximately $0.2 billion in proceeds.

There were no material acquisitions or divestitures in the fiscal first quarter of 2023.