Conditions of the approval
The Federal Trade Commission recently announced the US antitrust approval for Abbott Laboratories’ (ABT) acquisition of Alere (ALR). Under the conditions of the approval, Abbott has to sell two point-of-care medical testing businesses—a blood gas testing system and a cardiac marker system. Canada also approved the merger on September 28, 2017, with similar conditions.
In mid-noon trading, ABT stock rose ~3%, while ALR stock gained ~3.5%. The Vanguard Value ETF (VTV) rose ~0.40% the same day. VTV has ~0.81% of its total holdings in ABT.
Alere will also pay more than $13 million to Abbott Laboratories for the resolution of its SEC (Securities and Exchange Commission) charges for accounting fraud and improper payments. (For details, check out Market Realist’s “A Brief Recap of the Abbott–Alere Deal Developments.”)
Abbott announced its plans to buy Alere in February 2016, but the deal went through a series of problems related to discrepancies in Alere’s sales and accounting practices. However, Abbott finally announced its plans to buy Alere at a reduced price of $5.3 billion, compared with the previous offer of $5.8 billion in April 2017. (For more, check out “How Will Abbott Laboratories Benefit from Its Alere Acquisition?“)
Who will buy the Abbott’s divested businesses?
Abbott’s blood gas testing business and two Alere Ottawa facilities will be bought by Siemens Aktiengesellschaft, a private technology company with operations around the globe. The heart function testing system and a San Diego Alere facility will be bought by Quidel (QDEL), a major diagnostic healthcare products manufacturer in the US.
Abbott Laboratories previously divested its Abbott Medical Optics to Johnson & Johnson (JNJ) to focus on creating a more aligned business with strong core capabilities.