The takeover is set to be completed early next year

The new price is about 15% less than last year's original offer, which was revised after Guidant was forced to recall thousands of faulty products.

Many thought this would put the deal into jeopardy and J&J showed signs of wanting to bow out of the takeover.

Guidant then sued J&J to force the company to complete the deal.

But J&J said it felt justified to revise the terms of the bid given that recalls of heart devices and regulatory probes had eroded the value of Guidant.

Heart trouble

Guidant was investigated over its failure to inform doctors about potential defects in some of its implantable devices used to manage abnormal heartbeats.

Guidant was in a position that was one in which they had to go through with this merger Steve Brozak, WBB Securities analyst

The company was later forced to recall some of its most lucrative heart devices because of growing safety fears.

Finding itself in a vulnerable position, and having already made operational preparations for the takeover deal, Guidant has had little choice but to bow to J&J's revised terms.

"Guidant was in a position that was one in which they had to go through with this merger," said Steve Brozak, analyst at WBB Securities.

Guidant's chairman James Cornelius said the marriage with J&J helps "amplify the opportunity for us to do more for patients with cardiovascular disease".

Under the new terms each Guidant stock will be swapped for $33.25 cash and 0.493 shares of J&J stock.