Johnson & Johnson (NYSE:JNJ) and Synthes Inc. officially sealed the deal today after more than a year of wrangling with government authorities, with J&J announcing a reorganized payment structure designed to minimize its tax burden on the merger.

J&J will pay $19.7 billion for the Swiss orthopedics giant, which will be folded into its DePuy business to form the DePuy Synthes Cos. of Johnson & Johnson. The New Brunswick, N.J.-based healthcare conglomerate said it plans to fund part of the deal with overseas cash stores, in lieu of solely with U.S. dollars, in an accelerated share buyback program.

"This is a very exciting day for the people of Synthes and DePuy as we become 1 comprehensive enterprise dedicated to advancing patient care through innovative, total solutions that are developed from a deep understanding of our customers’ needs," former Synthes CEO Michel Orsinger, now DePuy Synthes orthopedics group global chairman, said in prepared remarks. "We are building on the legacy and strengths of 2 great companies to create one organization that will be agile and responsive in today’s evolving health care environment."

U.S. regulators approved the merger on Monday after getting a guarantee that Johnson & Johnson would ditch some of its DePuy orthopedics properties. EuroZone regulators approved the merger in April.

J&J announced yesterday that the merger would add to its bottom line this year by 3¢-5¢ per share, reversing previous guidance that the merger would bring down earnings by 22¢ per share, an "upside surprise relative to prior guidance," according to Wells Fargo analyst Larry Biegelsen.

The guidance change reflects the decision to complete the merger using overseas cash stores from J&J’s Jannsen Pharmaceutical business in Ireland, which puts the merger in a better tax position in the U.S.

Funds from Jannsen will be used to acquire $12.9 billion in JNJ shares from bankers Goldman Sachs and JPMorgan Chase, which J&J will use, along with cash, to pay for Synthes. The move will shield J&J from part of its U.S. tax burden and insulate shareholders from previously expected dilution.

Wall Street lauded the decision, with Jeffries upgrading JNJ shares from "hold" to "buy" and raising its per-share price target to $72. Tax experts similarly approved the measure, with one calling the strategy "kind of brilliant" and another describing it as an "innovation," Forbes reported.

JNJ shares have crept increasingly higher since the new deal structure was announced. Shares closed 1.5% higher at $63.08 last night, and were up another 1.2% to $65.19 as of about 12:20 p.m. today.

"The completion of the Synthes acquisition creates the world’s most innovative and comprehensive orthopedics business and reflects our long-standing strategy of leadership within attractive health care markets," J&J CEO Alex Gorsky said in prepared remarks. "The combination of these two respected leaders – Synthes and DePuy –  will enable us to better serve clinicians and patients worldwide, bring new innovations to the orthopedics and neurological marketplace, and strengthen our ability to compete in developing markets."

The deal, the largest in J&J’s history, was initially confirmed in April 2011 as the healthcare giant was facing a 23% drop in quarterly profits. The merger is expected to change the orthopedics landscape; J&J hopes it will revive its troubled DePuy brand, which is in the midst of a controversial recall regarding metal-on-metal hip implants that fail more frequently expected from clinical trials and may expose patients to toxic chemicals as they erode.