On May 16, Zoetis entered a definitive merger agreement with Abaxis where Zoetis will acquire Abaxis for $83.00 per share for a total of ~$2.0 billion in an all-cash deal. The transaction is expected to strengthen the position of Zoetis in veterinary diagnostics. Abaxis has scheduled a special meeting on July 31, 2018, where shareholders will vote on the transaction. If shareholders vote in favor of the deal, Zoetis plans to complete the acquisition shortly after the special meeting. Zoetis plans to fund the purchase through existing cash and new debt.
Zoetis (ZTS) is a leading animal health company focused on discovering, developing, manufacturing, and commercializing veterinary medicines and vaccines. It also provides diagnostic products, biodevices, genetic tests, and other services. Zoetis’s products are sold in over 100 countries worldwide.
Abaxis manufactures portable blood analysis systems that are used in medical specialties in human and veterinary patients to provide rapid blood constituent measurements to clinicians. Abaxis provides diagnostic instruments, consumable discs, kits, and cartridges for animal health. The VetScan diagnostic instruments and consumables from Abaxis’s portfolio have a large customer base in North America.
The Health Care Select Sector SPDR ETF (XLV) holds 1.3% of its total investments in Zoetis (ZTS), 2.5% in Eli Lilly (LLY), and 5.0% in Merck (MRK). Eli Lilly operates its animal health business through Elanco, while Merck also has animal health products in its portfolio.