January 19, 2007—General Electric Company (GE), Fairfield, Conn, announced yesterday its pending acquisition of the in vitro and point-of-care diagnostics divisions of Abbott, Abbott Park, Ill. GE will pay $8.13 billion in cash for the two businesses. The transaction does not include Abbott’s molecular diagnostics and diabetes care businesses.
Abbott’s in vitro diagnostics complement GE’s offerings in the in vivo diagnostics sphere; the point-of-care division, formerly known as i-STAT, manufactures diagnostic products for blood analysis. The two businesses are expected to generate net sales of $2.7 billion in fiscal year 2006.
“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 GE Chairman and CEO Jeffrey R. Immelt. “Abbott’s diagnostic business is the premier platform in this industry and fits very well with our health care strategy. 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.”
Over the last few months GE has been selling its slower-growth businesses, such as insurance and plastics, and investing in areas such as energy, rail engines, health care technology, and water processing technology.
The transaction is expected to be neutral to Abbott’s 2007 earnings per share, but accretive beginning in 2008; the deal is expected to close in the first half of 2007.
—Cat Vasko
