Baxter Announces Debt Tender Offers

Deerfield - 2015-06-18

Baxter International Inc. (NYSE: BAX) announced today that it has commenced two cash tender offers for specified series of its outstanding debt.

The terms and conditions of the Tender Offers are described in Baxter's Offer to Purchase (the "Offer to Purchase") and the related Letter of Transmittal, each dated today.

The Tender Offers consist of two separate offers: an Any and All Tender Offer and a Maximum Tender Offer, both made pursuant to the Offer to Purchase, which sets forth a comprehensive description of the terms of each of the Tender Offers. In the Any and All Tender Offer, Baxter is offering to purchase any and all of the five series of notes listed in the table below. In the Maximum Tender Offer, Baxter is offering to purchase, subject to the maximum tender amount described below and any resulting proration, the notes of the series listed below in the preferential order of the acceptance priority levels identified in the table below.

Offer for Notes Listed Below: Any and All Tender

Offer for Notes Listed Below: Maximum Tender

Baxter Tender Offers (1) Per $1,000 principal amount of notes validly tendered and accepted for purchase, which amount includes an early tender payment of $30. Does not include accrued interest, which will be paid on notes, accepted for purchase. (2) This represents the hypothetical Total Consideration for each series of notes, other than the 2042 notes (as defined below), and is calculated based on a yield to the maturity date for each applicable series of notes. (3) Actual Total Consideration for the 2042 Notes.

Baxter is offering to purchase the maximum aggregate principal amount of notes in the Maximum Tender Offer that it can purchase (including accrued interest) for up to the positive difference (if any) between $3.0 billion and the total consideration that is paid (including accrued and unpaid interest) for the notes purchased through the Any and All Tender Offer. The acceptance of any tendered notes subject to the Maximum Tender Offer may be subject to proration, as described in the Offer to Purchase. Baxter reserves the right in its sole discretion to increase the Maximum Tender Offer cap. Baxter currently intends to redeem such amount of notes subject to the Maximum Tender Offer and/or 5.900% Notes due September 2016 (the "2016 Notes") so that the sum of (i) the aggregate redemption price of notes subject to the Maximum Tender Offer or 2016 Notes redeemed in the redemption (including accrued and unpaid interest) and (ii) the aggregate amount paid to acquire all notes accepted for purchase pursuant to both Tender Offers (including accrued interest) equals approximately $3.0 billion in the aggregate. However, Baxter is not obligated to undertake any such redemption, and there can be no assurance that Baxter will redeem any notes subject to the Maximum Tender Offer or 2016 Notes that remain outstanding after consummation of the Tender Offers or of the timing of, or amount of any notes subject to the Maximum Tender Offer and/or 2016 Notes subject to, any such redemption.

The Any and All Tender Offer is scheduled to expire at 11:59 p.m., New York City ("NYC") time on July 16, 2015 (the "Any and All Expiration Time"), unless extended or earlier terminated by Baxter at its sole discretion. Holders of notes subject to the Any and All Tender Offer must validly tender and not validly withdraw their notes at or prior to 5:00 p.m. NYC time on July 1, 2015 (the "Any and All Early Tender Time"), unless extended or earlier terminated by Baxter at its sole discretion, to be eligible to receive the applicable total consideration, which includes an early tender payment of $30 per $1,000 principal amount of notes validly tendered and accepted for purchase (the "early tender payment"). Holders of notes subject to the Any and All Tender Offer who tender their notes after the Any and All Early Tender Time and at or prior to the Any and All Expiration Time, will be eligible to receive the applicable tender offer consideration, which is the total consideration minus the early tender payment. Holders of notes subject to the Any and All Tender Offer may not withdraw their tendered notes after the Any and All Early Tender Time, subject to applicable law.

The Maximum Tender Offer is scheduled to expire at 11:59 p.m. NYC time on July 16, 2015, (the "Maximum Tender Expiration Time") unless extended or earlier terminated by Baxter, at its sole discretion. Holders of notes subject to the Maximum Tender Offer must validly tender and not validly withdraw their notes at or prior to 5:00 p.m. NYC time on July 1, 2015 (the "Maximum Early Tender Time"), unless extended or earlier terminated by Baxter at its sole discretion, to be eligible to receive the applicable total consideration, which includes the early tender payment. Holders of notes subject to the Maximum Tender Offer who tender their notes after the Maximum Early Tender Time and at or prior to the Maximum Tender Expiration Time, will be eligible to receive the applicable tender offer consideration, which is the total consideration minus the early tender payment. The applicable total consideration or tender offer consideration will only be paid to holders of tendered notes that are subject to the Maximum Tender Offer to the extent that Baxter accepts such notes for purchase. Holders of notes subject to the Maximum Tender Offer may not withdraw their tendered notes after the Maximum Early Tender Time, subject to applicable law.

The total consideration for each $1,000 principal amount of notes, other than the 3.650% Notes due 2042 (the "2042 Notes"), validly tendered and accepted for purchase pursuant to the Tender Offers will be determined in the manner described in the Offer to Purchase by reference to a fixed spread specified for each series of notes over the yield based on the bid side price of the U.S. Treasury Security specified for each series of notes on the front page of the Offer to Purchase or in the table above, as calculated by Goldman, Sachs & Co. and BofA Merrill Lynch at 2:00 p.m. NYC time on July 1, 2015, for the Any and All Tender Offer, and 2:00 p.m. NYC time on July 1, 2015, for the Maximum Tender Offer. The actual total consideration for each $1,000 principal amount of 2042 notes validly tendered at or prior to the Any and All Early Tender Time and accepted for purchase pursuant to the Any and All Tender Offer is specified in the table above. In addition to the total consideration or the tender offer consideration, as applicable, accrued and unpaid interest on the purchased notes will be paid from the applicable last interest payment date to, but not including, the applicable settlement date for such purchased notes.

Payment for notes tendered at or prior to the Any and All Early Tender Time and purchased in the Any and All Tender Offer will be made promptly after the Any and All Early Tender Time, if the Any and All Tender Offer is not extended or earlier terminated. Payment for the notes tendered after the Any and All Early Tender Time and purchased in the Any and All Tender Offer will be made promptly after the Any and All Expiration Time, if the Any and All Tender Offer is not extended or earlier terminated. Payment for the notes purchased in the Maximum Tender Offer will be made promptly after the Maximum Tender Expiration Time, if the Maximum Tender Offer is not extended or earlier terminated.

The lead dealer managers for the Tender Offers are Goldman, Sachs & Co., BofA Merrill Lynch and Citigroup Global Markets Inc. Questions regarding the Tender Offers may be directed to BofA Merrill Lynch at 888-292-0070 (toll-free) and 980-683-3215 (collect) or Goldman, Sachs & Co. at 800-828-3182 (toll-free) and 212-357-0215 (collect). Copies of the Offer to Purchase and the related Letter of Transmittal may be obtained from the Information Agent, D.F. King & Co., Inc. at 800-761-6521 (toll-free) or 212-269-5550 (collect) or in writing at 48 Wall Street, 22nd Floor, New York, New York 10005.

The Tender Offers are subject to the satisfaction of certain conditions set forth in the Offer to Purchase and the related Letter of Transmittal, including a financing condition. If any of the conditions are not satisfied, Baxter will not be obligated to accept for payment, purchase or pay for, and may delay the acceptance for payment of, any tendered notes, in each event subject to applicable laws, and may terminate the Tender Offers. The Tender Offers are not conditioned on the tender of a minimum principal amount of notes. Baxter is not soliciting consents from holder of notes in connection with the Tender Offers.

This press release is neither an offer to purchase, nor a solicitation of an offer to sell the notes or any other securities. Baxter is making the Tender Offers only by, and pursuant to, the terms of the Offer to Purchase and the related Letter of Transmittal. The Tender Offers are not being made in any jurisdiction in which the making of or acceptance thereof would not be in compliance with the securities laws, blue sky laws or other laws of such jurisdiction. None of Baxter, the Dealer Managers, the Tender Agent or the Information Agent make any recommendation as to whether holders should tender or refrain from tendering their notes. Holders must make their own decision as to whether to tender notes and, if so, the principal amount of the notes to tender.

Baxter International Inc., through its subsidiaries, develops, manufactures and markets products that save and sustain the lives of people with hemophilia, immune disorders, cancer, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. As a global, diversified healthcare company, Baxter applies a unique combination of expertise in medical devices, pharmaceuticals and biotechnology to create products that advance patient care worldwide.

This release includes forward-looking statements concerning Baxter's expectation regarding launching and completing (subject to the satisfaction of conditions of the Tender Offers, which include satisfaction of a financing condition) the Tender Offers. The statements are based on assumptions and many important factors, including the following, which could cause actual results to differ materially from those in the forward-looking statements: continued strength in Baxter's financial position, including cash flows; the ability to successfully separate the biopharmaceutical and medical products businesses on the terms or timeline currently contemplated, if at all, and achieve the intended results; the ability of Baxalta to obtain debt financing on favorable terms or at all; and other risks identified in Baxter's most recent filing on Form 10-K, Baxalta's most recent filing on Form 10 and other Securities and Exchange Commission filings, all of which are available on Baxter's website. Baxter does not undertake to update its forward-looking statements.