Abbott Laboratories will not now be pocketing over $8 billion from the sale of a sizeable part of its diagnostics unit as the firm and potential buyer General Electric Co have together decided to call the deal off.

In January, GE said that it was prepared to pay $8.13 billion to acquire Abbott’s primary in vitro and point-of-care diagnostics businesses. However, the firms have noted that “GE and Abbott worked diligently to complete the transaction but were unable to reach agreement on final terms and conditions. As a result, they agreed it was in the best interests of both companies to mutually terminate their agreement and discussions”.

No further details for the rupture were given and Abbott just limited itself to noting that it will have no impact on earnings-per-share guidance, excluding specified items, for 2007 or indeed the second quarter. The company had been hoping to use the proceeds of the sale to pay down debt.

It now seems likely that the two divisions will be kept with Abbott’s molecular diagnostics and diabetes care units which were not part of the GE deal. The businesses that were up for sale had annual revenues of around $2.7 billion.