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Abbott Labs Is Buying St. Jude Medical for $25 Billion

April 28, 2016, 11:44 AM UTC
Abbott Laboratories Buys Piramal's India Unit For $3.72 Billion
Abbott Laboratories signage is visible on the campus of its headquarters in Abbott Park, Illinois, U.S., on Friday, May 21, 2010. Abbott Laboratories will buy Piramal Healthcare Ltd.Õs branded generic-medicine unit in India for $3.72 billion, becoming the country's biggest drugmaker and tapping into a market expected to more than double by 2015. Photographer: Tim Boyle/Bloomberg News
Photograph by Tim Boyle — Bloomberg via Getty Images

Abbott Laboratories (ABT) said it agreed to buy medical device maker St. Jude Medical (STJ) for $25 billion to add heft to its heart and neurological devices business.

St. Jude shareholders will receive $46.75 in cash and 0.8708 Abbott shares, representing a total consideration of about $85 per share.

The offer represents a 37% premium to St. Jude’s Wednesday closing. St. Jude’s shares were up about 27% premarket on Thursday.

Abbott will assume or refinance St. Jude’s net debt of about $5.7 billion.

The deal will add to Abbott’s adjusted earnings per share in the first full year after the close of the transaction, the company said. It will add 21 cents per share in 2017 and 29 cents in 2018.

 

Abbott’s cardiovascular device unit will have annual sales of $8.7 billion after the business are combined.