Abbott To Acquire Alere In $5.8 Bln Deal

(RTTNews) - Abbott Laboratories (ABT) agreed to acquire Alere Inc. (ALR) in a deal with an equity value of $5.8 billion. Abbott will pay $56 per Alere share or a 50% premium over Friday's closing price.

Following the announcement, ALR shares are soaring more than 46 percent in pre-market trading.

"The combination of Alere and Abbott will create the world's premier point of care testing business and significantly strengthen and grow Abbott's diagnostics presence. We want to offer our customers the best and broadest diagnostics solutions. Alere helps us do that," said Miles White, chairman and chief executive officer, Abbott.

The transaction, which has been approved by the boards of directors of Alere and Abbott, is subject to the approval of Alere shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.

Once the transaction is completed, Abbott will become the leading diagnostics provider of point of care testing. Abbott's total diagnostics sales will exceed $7 billion after the close, Abbott said.

As per the terms of the agreement, Alere shareholders will receive $56 per common share in cash at the completion of the transaction, and Alere will become a subsidiary of Abbott. Alere's net debt, currently $2.6 billion, will be assumed or refinanced by Abbott.

Abbott expects that the transaction will be immediately accretive to its ongoing earnings per share upon close and significantly accretive thereafter, with approximately 12-13 cents of accretion in 2017 and more than 20 cents in 2018. The combination is anticipated to result in annual pre-tax synergies approaching $500 million by 2019 and increasing thereafter, including both sales and operational benefits.

ALR closed Friday trading at $37.20, up $0.67 or 1.83%. In Monday's pre-market trading, the company's shares are up $17.30 or 46.51% to $54.50.

ABT closed Friday trading at $37.85, up $1.14 or 3.11%.