After major media chatter over the last few days about a possible acquisition, General Electric finally announced late Thursday it plans to purchase Abbott Laboratories’ primary in vitro diagnostics businesses and Abbott Point-of-Care diagnostics business (formerly known as i-STAT) for $8.13 billion in cash. Abbott will retain its very profitable Molecular Diagnostics and Diabetes Care businesses which are not part of the transaction, the companies said.
The move will broaden GE Healthcare's diagnostic offerings and help the company compete against Siemens Medical Solutions which acquired Bayer AG's diagnostic division last year.
Abbott's in vitro diagnostic, which includes systems for testing blood or urine samples, will work well in conjunction with GE's current in vivo diagnostic imaging systems, as well as its molecular imaging, information technology, and patient monitoring capabilities, GE said. Overall, the move will strengthen GE’s efforts to pair early diagnosis with information technology towards a focus on earlier diagnosis, pre-symptomatic disease detection and disease prevention throughout healthcare.
"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,” said Jeffrey R. Immelt, chairman and CEO. “Abbott's global position in the growing diagnostics field is aligned with our objective to deliver a comprehensive array of diagnostic products to customers around the world."
The transaction is still subject to regulatory approvals and other customary conditions. It has, however, already been approved by the Boards of Directors of Abbott and GE with an expected close in the first half of 2007.
Abbott is a world leader in immunoassays and blood screening. Abbott's range of medical tests and diagnostic instrument systems are used worldwide by hospitals, laboratories, blood banks, and physician offices to diagnose and monitor diseases such as HIV, hepatitis, cancer, heart failure and metabolic disorders, as well as assess other important indicators of general health.
Abbott Point-of-Care manufactures diagnostic products for blood analysis to provide health care professionals critical diagnostics information accurately and immediately at the point of patient care. In addition to its offerings in the blood gas and chemistries segment, Abbott also provides point-of-care cardiac assays to the emergency room.
Abbott's in vitro diagnostics business, including Point-of-Care, generates net annual sales of approximately $2.7 billion.
"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,” Miles D. White, chairman of the Board and chief executive officer of Abbott. “As part of GE, Abbott's core diagnostics and point-of-care businesses will be powerfully positioned to sustain and extend their market success."