Diversified manufacturer General Electric Company through its GE Medical Systems division and Instrumentarium Corporation, a Helsinki, Finland-based medical technology company, announced on Wednesday that the companies have entered into a definitive combination agreement for GE to acquire Instrumentarium. Pursuant to this agreement, GE will initiate a tender offer to acquire all of the outstanding Instrumentarium shares for EUR 40 (U.S. $41.06) per share payable in cash. The offer is expected to commence within 30 days. The boards of directors of both Instrumentarium and GE have approved the combination agreement.
"Instrumentarium is an innovator in the area of healthcare technology, with a strong focus in the perioperative area," said Joseph M. Hogan, president and CEO of GE Medical Systems. "The combination of Instrumentarium and GE positions us to support our healthcare customers with a complementary range of anesthesia monitoring and delivery, critical care, infant care, and diagnostic imaging solutions to help ensure the highest quality of patient care."
"With customer focus, perseverance, and diligence, we have created a world class company. GE is one of the most successful companies in the world. I do not have the slightest doubt about their desire to continue this development with us," stated Olli Riikkala, president and CEO of Instrumentarium.
Instrumentarium employs approximately 5,400 people worldwide and operates R&D and manufacturing facilities in Helsinki and Kuopio, Finland; Bromma and Jallivaara, Sweden; Nuremberg, Germany; and in the following U.S. locations—Madison, WI; Laurel, MD.; Louisville, CO.; Riverside, CA., and Redmond, WA. Additionally, Instrumentarium has sales and service subsidiaries in more than 20 countries globally and a network of distributors covering more than 100 countries.
"After evaluating the tender offer and receiving a fairness opinion from Credit Suisse First Boston (Europe) Limited that the tender offer consideration is fair to the holders of Instrumentarium shares and options, from a financial point of view, it is the Board's opinion that the transaction is in the shareholders' best interest. Therefore, the Board recommends this tender offer," said Timo Peltola, chairman of the Board of Directors of Instrumentarium.
"Instrumentarium is an excellent company with an outstanding reputation among healthcare customers," said Jeffrey R. Immelt, chairman and CEO of GE. "This is an extremely important business for GE, and we plan to grow Instrumentarium even further by investing in new technologies to improve clinical workflow, physician confidence, and patient outcomes."
Upon completion of the tender offer, GE intends to combine the operations of Instrumentarium with GE Medical Systems, and Helsinki will become the European headquarters for the GE Medical Systems Information Technologies business. Mr. Riikkala will continue in key leadership roles within GE Medical Systems and GE Medical Systems Information Technologies focusing on the Global Anesthesia and Perioperative businesses and integration across Europe. These roles, and those of other key Instrumentarium executives, will be defined according to the Principles of Integration in the combination agreement and communicated as soon as possible.
This transaction, which is expected to close in 2003, is subject to a minimum acceptance condition of 80 percent, regulatory approvals and other customary conditions.
Under the terms of the combination agreement, the Board of Directors of Instrumentarium can recommend a special dividend in excess of EUR 0.70 per share up to an aggregate amount of EUR 200 million, that would be subject to approval at the Instrumentarium Annual General Meeting of shareholders in March 2003. To the extent such a special dividend is approved, the tender offer price of EUR 40 would be reduced by the per share amount of such special dividend. Should the closing of the transaction occur prior to the approval of the dividends at the Annual General Meeting of shareholders, the tender offer price will be increased by EUR 0.70 per share.
GE will also make an offer for all outstanding options of Instrumentarium. The offer price for the stock options is EUR 52.29 per 1998A option, EUR 56.65 per 1998B option, EUR 60.36 per 1998C option, EUR 45.46 per 2001A option and EUR 36.92 per 2001B option.
Goldman Sachs is advising GE Medical Systems on this transaction. Credit Suisse First Boston (Europe) Limited is advising Instrumentarium.
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