Abbott Finally Agrees to Buy Alere After Cutting the Price to $4.5 Billion
Diversified healthcare company Abbott Laboratories on Friday agreed to buy Alere for about $4.48 billion, ending a prolonged legal battle over its plan to buy the diagnostic-testing company.
Abbott’s revised offer of $51 per share represents a premium of 20.5% to Alere’s closing price on Thursday, but is below the earlier $56-per-share offer announced in February last year.
Reuters’ calculation of the deal value is based on Alere’s 87.9 million diluted weighted-average common shares outstanding as of Sept. 30, 2016.
In April last year, Abbott (ABT) had raised concerns about the accuracy of various representations, warranties and covenants made by Alere (ALR) in the earlier merger agreement, and had offered to pay $30 million to $50 million to terminate the deal.
Waltham, Massachusetts-based Alere, which makes tests for infections such as HIV, tuberculosis, malaria and dengue, sued Abbott in August last year in an attempt to force the company to move ahead with the deal.
In December, Abbott filed a suit to terminate its proposed acquisition of Alere, citing a “substantial loss” in the value of the diagnostics company since they struck a deal in February 2016.
Abbott and Alere said on Friday that the companies had agreed to dismiss their respective lawsuits, and the deal is expected to close by the end of the third quarter of 2017.
The deal will help Abbott expand in point-of-care diagnostic testing, a market that is growing as physicians increasingly adopt rapid tests that speed up treatment.
Point-of-care tests provide results to doctors in a matter of minutes and can be conducted in the physician’s office, an ambulance or even at home.
Illinois-based Abbott makes products ranging from Similac infant formula to Ensure beverages for adults.
The news about the revised deal was first reported by Financial Times, citing people close to the matter.