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Abbott to Acquire Alere for $5.8B

NEW YORK (GenomeWeb) – Abbott has entered into a definitive agreement to acquire Alere for $5.8 billion, the companies said today.

"The combination of Alere and Abbott will create the world's premier point-of-care testing business and significantly strengthen and grow Abbott's diagnostics presence," Miles White, Abbott's chairman and CEO, said in a statement.

On a conference call to discuss the transaction, he also noted, "The trends in point-of-care testing, which we're well aware of, make this the right time to make the move."

The transaction will be immediately accretive to Abbott's ongoing earnings per share upon close and significantly accretive thereafter, with approximately 12 to 13 cents of accretion in 2017 and more than 20 cents in 2018, the firms said, adding that the combination is anticipated to result in annual pre-tax synergies approaching $500 million by 2019 and increasing thereafter, including both sales and operational benefits.

Under the terms of the agreement Alere shareholders will receive $56 per common share in cash at the completion of the transaction, and Alere will become a subsidiary of Abbott. Alere's net debt of $2.6 billion will be assumed or refinanced by Abbott.

The transaction has been approved by the boards of directors of Alere and Abbott. It is subject to the approval of Alere shareholders, as well as the satisfaction of customary closing conditions and applicable regulatory approvals.

The announcement "marks an exciting and transformative milestone for Alere and one that provides an immediate benefit for our stockholders," Namal Nawana, Alere's president and CEO said. "Our leading platforms and global presence in point-of-care diagnostics combined with Abbott's broad portfolio of market-leading products will accelerate our shared goal of improving patient care."

The buy is also part of a larger M&A strategy, White said during the call. "This is a fundamental and key acquisition we're talking about today for our diagnostics business, but it's not the only thing on my radar screen, and it's not the only thing in the center of my radar screen," he said.

Other ongoing activities that White said were alluded to in the firm's earnings call last week are still a priority, he said, adding, "I believe that we've got balance sheet capability to pursue everything that's within our wish list, to strategically strengthen these businesses."  

The combined business will expand Abbott's platforms to include benchtop and rapid strip tests, and will offer a broad menu of point-of-care infectious disease, molecular, cardiometabolic, and toxicology testing. Abbott's global infrastructure will also drive accelerated growth of Alere's portfolio in key international markets, the firms said.

In Monday morning trade on the New York Stock Exchange, shares of Abbott were down slightly at $37.29, while Alere's shares were up about 45 percent at $54.00.