Press release

Baxter Announces Early Results of Debt Tender Offers

DEERFIELD – July 2, 2015 – Baxter International Inc. (NYSE: BAX) announced today the preliminary results, as of 5:00 p.m. New York City (“NYC”) time on July 1, 2015 (the “Early Tender Time”), of its previously announced cash tender offers (the “Tender Offers”) for specified series of its outstanding debt. As of the Early Tender Time, the aggregate principal amount of notes listed in the table below validly tendered and not validly withdrawn pursuant to the Any and All Tender Offer (as defined in Baxter’s Offer to Purchase dated June 18, 2015, the “Offer to Purchase”) was approximately $1.1 billion and the aggregate principal amount of notes validly tendered and not validly withdrawn pursuant to the Maximum Tender Offer (as defined in the Offer to Purchase) was approximately $1.6 billion. The table below sets forth the approximate aggregate principal amount of each series of notes that was validly tendered and not validly withdrawn at or prior to the Early Tender Time, as reported by D.F. King & Co., Inc, the Tender Agent.

Offer for Notes Listed Below: Any and All Tender Offer
CUSIP Numbers Title of Security Principal Amount Outstanding (US$mm) Acceptance Priority Level Aggregate Principal Amount Tendered at or Prior to Early Tender Time (US$mm)
071813 AW9 5.900% Notes due September 2016 $600 N/A $300
071813 AM1 6.625% Debentures due February 2028 $120 N/A $28
071813 AX7 6.250% Notes due December 2037 $500 N/A $233
071813 BE8 3.650% Notes due August 2042 $300 N/A $294
071813 BG3 4.500% Notes due June 2043 $500 N/A $243
Offer for Notes Listed Below: Maximum Tender Offer
CUSIP Numbers Title of Security Principal Amount Outstanding (US$mm) Acceptance Priority Level Aggregate Principal Amount Tendered at or Prior to Early Tender Time (US$mm)
071813 BL2 3.200% Notes due June 2023 $1,250 1 $1,103
071813 BF5 2.400% Notes due August 2022 $700 2 $495

The terms and conditions of the Tender Offers are described in the Offer to Purchase and the related Letter of Transmittal. The Tender Offers are currently scheduled to expire at 11:59 p.m. NYC time on July 16, 2015 (the “Expiration Time”).

Subject to the satisfaction of certain conditions set forth in the Offer to Purchase and the related Letter of Transmittal, Baxter expects to accept all notes that have been validly tendered at or prior to the Early Tender Time for payment pursuant to the Any and All Tender Offer. Holders of notes validly tendered and accepted for purchase pursuant to the Tender Offers at or prior to the Early Tender Time are eligible to receive the applicable Total Consideration (as defined in the Offer to Purchase), 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”), as described in the Offer to Purchase. As previously announced, the Total Consideration for the notes, other than the 3.650% Notes due 2042 (the “2042 Notes”), was determined as of 2:00 p.m. NYC time on July 1, 2015. Payment for notes tendered pursuant to the Any and All Tender Offer at or prior to the Early Tender Time and purchased in the Any and All Tender Offer is expected to be made on July 6, 2015. The Total Consideration for the 2042 Notes was fixed at the commencement of the Tender Offers. Payment for notes tendered pursuant to the Any and All Tender Offer after the Early Tender Time and purchased in the Any and All Tender Offer is expected to be made on July 17, 2015, if the Any and All Tender Offer is not extended. Payment for notes purchased in the Maximum Tender Offer is expected to be made on July 17, 2015, if the Maximum Tender Offer is not extended or earlier terminated. The acceptance of any tendered notes subject to the Maximum Tender Offer may be subject to proration, as described in the Offer to Purchase.

Holders of notes subject to the Tender Offers who validly tender their notes after the Early Tender Time and at or prior to the Expiration Time will be eligible to receive the applicable Tender Offer Consideration (as defined in the Offer to Purchase), which is the Total Consideration minus the Early Tender Payment, as described in the Offer to Purchase.

In addition to the applicable Total Consideration or Tender Offer Consideration, accrued and unpaid interest on such purchased notes will be paid from the applicable last interest payment date to, but not including, the applicable settlement date for such purchased notes. The applicable Total Consideration or Tender Offer Consideration will only be paid to holders of tendered notes that are subject to a Tender Offer to the extent that Baxter accepts such notes for purchase.

As the Early Tender Time has passed, holders of notes subject to the Tender Offers may not withdraw their tendered notes from either Tender Offer, subject to applicable law.

Although the Total Consideration to be paid (including accrued and unpaid interest) for notes purchased through the Tender Offers as of the Early Tender Time does not exceed $3.0 billion in the aggregate, in the event that Total Consideration to be paid (including accrued and unpaid interest) for notes purchased through the Tender Offers exceeds $3.0 billion in the aggregate, the principal amounts of notes accepted for purchase in the Maximum Tender Offer may be prorated as set forth in the Offer to Purchase. Baxter reserves the right in its sole discretion to increase the Maximum Tender Offer cap.    
    
The lead dealer managers for the Tender Offers are BofA Merrill Lynch, Goldman, Sachs & Co. 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. If any of the remaining 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.

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 provides a broad portfolio of essential renal and hospital products, including home, acute and in-center dialysis; sterile IV solutions; infusion systems and devices; parenteral nutrition; biosurgery products and anesthetics; and pharmacy automation, software and services. The company’s global footprint and the critical nature of its products and services play a key role in expanding access to healthcare in emerging and developed countries. Baxter’s 50,000 employees worldwide are building upon the company’s rich heritage of medical breakthroughs to advance the next generation of healthcare innovations that enable patient care.

This release includes forward-looking statements concerning Baxter’s expectation regarding completing (subject to the satisfaction of remaining conditions of the Tender Offers) 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 achieve the intended results from the recent separation of the biopharmaceutical and medical products businesses on the terms currently contemplated, if 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.