Abbott is delving deeper into diagnostics with a definitive deal to buy test-maker Alere for around $5.8 billion.
Alere's portfolio of products provides Abbott with access to new channels and geographies, including entry into fast-growing outlets, such as doctors' offices, clinics, pharmacies and at-home testing, the firm noted.
The US drug giant said the move will see it become the leading diagnostics provider of point of care testing, with total diagnostics sales overshooting $7 billion after the transaction closes.
The move is expected to be immediately accretive to Abbott's ongoing earnings per share upon close and significantly accretive thereafter, with around 12-13 cents added in 2017 and more than 20 cents in 2018. The combination is also expected to generate annual pre-tax synergies near $500 million by 2019 and increasing thereafter.
"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," said Miles White, Abott’s chairman and chief executive. "We want to offer our customers the best and broadest diagnostics solutions. Alere helps us do that."
News of the deal comes shortly after Abbott posted a 15% drop in profit for the fourth quarter of the year, largely because of exchange rate effects.