Abbott to sell lab diagnostics business to GE for $8.13B

US health care major Abbott Laboratories says it will sell its core laboratory diagnostics business, included in Abbott Diagnostics Division and Abbott Point of Care (formerly known as i-STAT) to GE for $8.13 billion in cash, resulting in after-tax proceeds of around $6.0 billion. Abbott's Molecular Diagnostics and Diabetes Care (glucose monitoring) businesses are not part of the transaction and will remain part of Abbott.

Over the past several years, Abbott has made a number of acquisitions and completed other strategic actions that have transformed the company and positioned it for higher growth, by strengthening the mix of its medical and pharmaceutical portfolio towards innovation and technology-driven businesses in emerging therapeutic areas. These include: Knoll Pharmaceuticals in 2001, TheraSense (blood glucose monitoring) in 2004 and Guidant's vascular business and Kos Pharmaceuticals (a leader in lipid management medicines), both in 2006. Additionally, Abbott spun off its hospital products business into a separate New York Stock Exchange-traded company named Hospira in 2004.

The sales are expected to be earnings-neutral for Abbott in 2007, excluding specified items, and accretive thereafter. JP Morgan analyst Michael Weinstein, quoted by Reuters, said "it's a really good deal for Abbott," bringing the Chicago-based company about $2.0 billion more from GE than he had expected. The news caused Abbott's share price to rise 24% to $52.79 in after-hours trading on January 18.