Web Date: January 25, 2007
GE Will Buy Two Abbott Diagnostic Businesses
General Electric has signed a definitive agreement to acquire Abbott Laboratories' in vitro and point-of-care diagnostics businesses for $8.13 billion in cash. The two expect to complete the deal in the first half of this year. Businesses in molecular diagnostics and diabetes care will remain part of Abbott.
The in vitro unit tests blood or urine samples to diagnose disease. GE says the new business will complement its existing in vivo diagnostic imaging systems, which use X-ray, magnetic resonance, ultrasound, and other imaging procedures to diagnose disease. The point-of-care unit manufactures diagnostic products for blood gas and blood chemistry analysis in doctor's offices and in emergency rooms.
The acquisition also builds on GE's 2003 purchase of Amersham, a maker of imaging agents and drug discovery tools. "Through this acquisition, we create the opportunity to integrate our broad-based competencies in diagnostics, life sciences, and health care information technology," says Joseph M. Hogan, president and CEO of GE Healthcare.
GE CEO Jeffrey R. Immelt says Abbott's diagnostic businesses will help the firm deliver "top-line growth, earnings expansion, and expanded margins." GE recently sold its silicones business to Apollo Management and now has its plastics unit up for sale, both because of lagging growth and profitability.
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