Abbott on January 18 today announced that it will sell its core laboratory diagnostics business included in the Abbott Diagnostics Division and Abbott Point of Care (formerly known as i-STAT) to General Electric for $8.13 billion in cash, resulting in approximately $6 billion in after-tax proceeds. Abbott's Molecular Diagnostics and Diabetes Care (glucose monitoring) businesses are not part of the transaction and will remain part of Abbott.
Over the past several years, Abbott has made a number of acquisitions and completed other strategic actions that have transformed the company and positioned it for higher growth by strengthening the mix of its medical and pharmaceutical portfolio toward innovation and technology-driven businesses in emerging therapeutic areas. These include: Knoll Pharmaceuticals in 2001, TheraSense (blood glucose monitoring) in 2004, and Guidant's vascular business and Kos Pharmaceuticals (a leader in lipid management medicines), both in 2006. Additionally, Abbott spun off its hospital products business into a separate NYSE-traded company named Hospira in 2004.
"The laboratory diagnostics market has changed considerably in the last decade. Innovation in this segment will be increasingly driven by automation, system integration and a host of skills that GE can offer," said Miles D. White, Abbott’s chairman and chief executive officer. "As part of GE, Abbott's core diagnostics and point-of-care businesses will be powerfully positioned to sustain and extend their market success."
The sale of Abbott's core laboratory diagnostics business to GE is expected to close in the first half of 2007 and is subject to customary closing conditions, including regulatory approvals.
The transaction is expected to be neutral to Abbott earnings per share in 2007, excluding specified items, and accretive thereafter.
Abbott is a global, broad-based health care company devoted to the discovery, development, manufacture and marketing of pharmaceuticals and medical products, including nutritionals, devices and diagnostics. The company employs 65,000 people and markets its products in more than 130 countries.
