Abbott pays $2.9 billion to gain Latin American presence

May 16, 2014, 3:22 PM UTC

FORTUNE — Abbott Laboratories (ABT), the largest maker of heart stents and nutritional drinks such as Pedialyte and Ensure, has agreed to buy Chile’s CFR pharmaceuticals for $2.9 billion, adding to the dealmaking spreading through the healthcare industry.

The purchase will expand Abbott’s reach in the $73 billion Latin American pharmaceutical industry and more than double its presence within branded generic drugs, the company said. The Latin American pharma market is estimated to grow two to three times faster than developed markets over the coming years and reach $124 billion by 2018, according to IMS forecasts.

“The acquisition will significantly enhance and broaden Abbott’s Latin American footprint,” said Miles White, chairman and CEO of Abbott. “And is well aligned with our long-term strategy and commitment to fast-growing markets.”

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Abbott will acquire the holding company that owns 73% of CFR and will complete a cash tender offer for the remaining shares. The Illinois-based drug maker will assume about $430 million in debt to get the deal done.

The acquisition, which establishes Abbott as one of the top 10 pharma companies in Latin America, is expected to add about $900 million to the drug-maker’s sales in 2015, with expected double-digit sales growth over the next several years. Abbott hasn’t changed its full-year guidance and said the purchase will not affect ongoing earnings-per-share expectations.