Abbott Labs to Acquire Alere

Abbott Laboratories agreed to acquire diagnostic-test company Alere Inc. for roughly $4.8 billion, a deal Abbott expects will make it a leading provider of point-of-care testing.

The company's news release Monday placed the equity value of the deal at $5.8 billion. An Abbott Laboratories spokeswoman said the deal includes the impacts of restricted stock units, options and preferred shares.

Alere shares soared 46% to $54.40 in recent premarket trading to reflect the deal price of $56 a share, a 51% premium to Friday's close. Abbott also said Alere's net debt, currently about $2.6 billion, would be assumed or refinanced by Abbott.

The deal comes days after Abbott reported its profit fell 15% in the final quarter of the year, as the stronger dollar weighed on its results in emerging markets. The company also issued annual guidance sharply below Wall Street expectations. On the company's conference call, Abbott Chief Executive Miles White sounded pessimistic about making near-term acquisitions, particularly in emerging markets.

In its news release Monday, Abbott said more than half of Alere's $2.5 billion in annual sales are in the U.S.

Abbott said the deal also will expand its platforms to include benchtop and rapid strip tests. The company expects the transaction will boost its per-share earnings immediately upon closing, raise its per-share profit by 12 cents to 13 cents next year and provide a boost of more than 20 cents a share in 2018.

The combined company is expected to see pretax savings of $500 million a year by 2019, with more sales and operational benefits afterward

Last month, Alere said fourth-quarter revenue would miss estimates as it faces foreign-exchange headwinds and a quiet North American flu season.

The companies plan to provide more details regarding the deal during a conference call at 9 a.m. EST.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

February 01, 2016 09:15 ET (14:15 GMT)

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