General Electric is to shell out $8.13 billion in cash for two of Abbott Laboratories’ core laboratory diagnostic businesses - its in vitro diagnostics and point-of-care. The deal does not include the group’s molecular diagnostics and diabetes care units.
The move will substantially enhance GE Healthcare’s diagnostics portfolio, with Abbott’s in vitro offerings (such as blood and urine tests) nicely complementing the firm’s in vivo diagnostic imaging systems (X-ray and magnetic resonance, for example).
Explaining the rationale behind the purchase, GE Chairman and Chief Executive Jeffrey R Immelt said: “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. Abbott’s diagnostics business is the premier platform in this industry and fits very well with our healthcare strategy.”
And Miles White, Abbott’s Chairman of the Board and Chief Executive Officer, explained: “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. 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 transaction, which still requires regulatory approvals, has been cleared by both firms’ boards, and should close in the first half of 2007.