Health care giant Johnson & Johnson (NYSE: JNJ – $111.84) has agreed to acquire Swiss-based Actelion Ltd. for $30 billion in cash, in an unusual deal that will also spin out the biotech company’s drug-discovery operations. The acquisition, the largest in J&J’s history, ends weeks of seesaw negotiations. J&J initially abandoned talks, only to resume them about a week later after the companies entered into exclusive negotiations. The deal’s peculiar structure, in carving out early-stage research, addresses Actelion’s CEO Jean-Paul Clozel’s longstanding resistance to selling the business over concerns that an acquisition would destroy the company’s drug-discovery engine. At the same time, it gives J&J a clutch of promising new drugs that will bolster its portfolio of rare-disease treatments as its top-selling drug Remicade faces new competition. The new Actelion drugs would immediately and significantly add to J&J sales, while giving the company access to promising candidates for multiple sclerosis and hypertension. The spin-off of the drug research business into a separate company called R&D NewCo, whereby Johnson & Johnson will initially hold 16% of the shares of the business, with an option to acquire another 16%. JNJ has a yield of 2.8% and above-average dividend growth prospects. Conservative investors with an eye on income may consider maintaining positions as a core portfolio holding.