Abbott is selling two of its laboratory diagnostics businesses to GE for $8.13 billion in cash. The deal includes the Abbott Diagnostics Division and Abbott Point of Care, which according to GE, is expected to generate net sales of approximately $2.7 billion in 2006.
"The laboratory diagnostics market has changed considerably in the last decade," notes Miles D. White, chairman and CEO, Abbott. “Innovation in this segment will be increasingly driven by automation, system integration, and a host of skills that GE can offer. 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 in vitro diagnostics unit focuses on test tube laboratory testing equipment, while the point-of-care diagnostics arm makes products for hospitals and doctor surgeries that can test patients on-site.
GE points out that Abbott’s in vitro diagnostics complement its existing positions in in vivo diagnostic imaging systems as well as its molecular imaging, information technology, and patient monitoring capabilities.
“This acquisition is consistent with GE’s strategy to invest in high-technology global infrastructure businesses that deliver strong top-line growth, earnings expansion, and expanded margins,” comments Jeffrey R. Immelt, GE chairman and CEO. “Abbott’s diagnostics business is the premier platform in this industry and fits very well with our Healthcare strategy.”
The companies expect to close this transaction during the first half of 2007. Abbott predicts it will be neutral to its earnings per share in 2007, excluding specified items, and accretive thereafter.