January 18, 2007 - General Electric Company (NYSE: GE) and Abbott (NYSE: ABT), a global leader in medical diagnostic instruments and tests, announced today that they have entered into a definitive agreement for GE to acquire Abbott’s primary in vitro diagnostics businesses and Abbott Point-of-Care diagnostics business (formerly known as i-STAT) for $8.13 billion in cash. Abbott’s Molecular Diagnostics and Diabetes Care businesses are not part of the transaction and will remain part of Abbott.
The addition of two of Abbott’s core laboratory diagnostics businesses will broaden GE Healthcare’s diagnostic offerings. Abbott’s in vitro diagnostic (in vitro diagnostics test blood or urine samples to diagnose disease or other conditions) complement GE’s existing positions in in vivo diagnostic imaging systems (in vivo imaging uses X-ray, magnetic resonance, ultrasound or other imaging procedures to look at what is in the body to diagnose disease), as well as its molecular imaging, information technology, and patient monitoring capabilities across the complete healthcare continuum.
GE Chairman and CEO Jeffrey R. Immelt, said, “This acquisition is consistent with GE’s strategy to invest in high-technology global infrastructure businesses that deliver strong top-line growth, earnings expansion and expanded margins. Abbott’s diagnostics business is the premier platform in this industry and fits very well with our Healthcare strategy. Abbott’s global position in the growing diagnostics field is aligned with our objective to deliver a comprehensive array of diagnostic products to customers around the world.”
The transaction, which is subject to regulatory approvals and other customary conditions, has been approved by the Boards of Directors of Abbott and GE and is targeted to close in the first half of 2007.
The acquisition reflects GE Healthcare’s strategy to combine early diagnosis with information technology to enable a new "early health" model of care focused on earlier diagnosis, pre-symptomatic disease detection and disease prevention.
Abbott’s in vitro diagnostics business is a global leader with a strong tradition of developing first-of-a-kind products that have helped create the modern diagnostics industry. Abbott is a world leader in immunoassays and blood screening. Abbott’s broad range of medical tests and diagnostic instrument systems are used worldwide by hospitals, laboratories, blood banks, and physician offices to diagnose and monitor diseases such as HIV, hepatitis, cancer, heart failure and metabolic disorders, as well as assess other important indicators of general health.
Abbott Point-of-Care manufactures diagnostic products for blood analysis to provide health care professionals critical diagnostics information accurately and immediately at the point of patient care. In addition to its excellent offerings in the blood gas and chemistries segment, Abbott also provides point-of-care cardiac assays to the emergency room.
Abbott’s in vitro diagnostics business, including Point-of-Care, is expected to generate net sales of approximately$2.7 billion in 2006.
Miles D. White, Abbott’s Chairman of the Board and Chief Executive Officer, said, “The laboratory diagnostics market has changed considerably in the last decade. Innovation in this segment will be increasingly driven by automation, system integration and a host of skills that GE can offer. As part of GE, Abbott’s core diagnostics and point-of-care businesses will be powerfully positioned to sustain and extend their market success.”
For Abbott, the transaction is expected to be neutral to earnings-per-share in 2007 before specified items and accretive thereafter.
GE said the transaction will be accretive to earnings.
Joe Hogan, president and CEO of GE Healthcare, said, “Over the last 5–to-10 years, we have been able to drive organic growth as well as successfully integrate major acquisitions like Amersham in a way beneficial to employees and investors. Through this acquisition, we create the opportunity to integrate our broad-based competencies in diagnostics, life sciences and healthcare information technology. In-vitro diagnostics and in vivo imaging continue to become more important in providing comprehensive diagnostic solutions. Our capabilities combined with Abbott’s in vitro diagnostics and point-of-care diagnostic businesses will allow GE to provide customers with better tools for the full care continuum, enhancing their decision-making capabilities in key disease areas such as oncology and cardiology, and enabling early disease detection, diagnosis and treatment. ”
GE will discuss this transaction as well as preliminary fourth-quarter and full-year results on a conference call and webcast at 8:30 a.m. ET on Friday, Jan. 19. Call information is available at www.ge.com/investor and related charts will be posted there prior to the call.