Abbott To Sell Generic Drug Unit To Mylan For $5.3 Billion
Abbott Labs headquarters in Illinois Photograph by Daniel Acker — Bloomberg via Getty Images

Abbott Labs Is Boosting Its Diagnostic Business With This Big Buy

Updated: Feb 01, 2016 3:42 PM UTC

Abbott Laboratories (abt) said it would buy Alere (alr) for $5.8 billion in a deal that would expand its diagnostics business and make it a leader in point-of-care testing.

Point-of-care tests help increase the speed of treatment by bringing test results to doctors in a matter of minutes as they can be conducted in the physician's office, an ambulance or even at home.

Alere, which has annual sales of $2.5 billion, makes tests for infections such as HIV, tuberculosis, malaria and dengue.

Abbott will pay $56 per share in cash, a premium of about 51% to Alere's Friday closing. Alere shares were trading at $53.83 on Monday. Abbott was down 1.7%.

Abbott , which had annual sales of $20.4 billion in 2015, said its total diagnostics sales would exceed $7 billion after the close of the deal.

Abbott , which makes products ranging from Similac infant formula to Ensure beverages for adults, reported lower-than-expected quarterly revenue for the first time in four quarters last week, due to a strong dollar.

The deal will immediately add to Abbott 's earnings per share upon close and contribute significantly thereafter, the companies said.