Abbott Laboratories closed its acquisition of Alere Inc after an agreement to divest Alere’s epoc blood gas analysis system to Siemens Healthineers.
Nearly two years after the deal was originally announced, Abbott Laboratories has closed its acquisition of Alere Inc after divesting part of Alere’s diagnostic business. According to an article by Street Insider, the Federal Trade Commission (FTC) required Abbott to divest two specific point-of-care assets from Alere to Siemens Healthineers and Quidel Corp in order to receive federal approval for the acquisition.[1]
In February 2016, Abbott Laboratories entered into an agreement to acquire Alere Inc for $5.8 billion, according to multiple news reports. Under the terms of the agreement, Abbott would pay $56 per common share at a total expected equity value of $5.8 billion. At the time of the agreement, Abbott believed the merger would make it the leading diagnostics provider of point of care testing, with total diagnostics sales to exceed $7 billion, according to a February 2016 press announcement.[2] “The combination of Alere and Abbott will create the world’s premier point of care testing business and significantly strengthen and grow Abbott’s diagnostics presence,” said Miles D. White, chairman and chief executive officer, Abbott.
However, an undated complaint filed by the FTC alleged the acquisition “would result in market concentration and likely harm competition in the US” for sales of POC blood gas testing systems and POC cardiac marker testing systems, an FTC statement said.[3]
In response, Abbott and Siemens Healthineers signed a definitive agreement in July to divest a subsidiary of Alere to Siemens. Epocal Inc, which includes Alere’s epoc Blood Analysis System, its flagship, handheld, wireless ABG test, was sold to Siemens. Financial details of the transaction, which was subject to completion and FTC approval of Abbott’s acquisition of Alere, were not disclosed. “We want to help our customers innovate care delivery,” said Peter Koerte, president, Point of Care Diagnostics, Siemens Healthineers. “…The acquisition of the epoc product line will enable us to provide the right solution in the right setting, all from one partner.”[4]
On September 28, the FTC published a report[5] that endorsed a proposed settlement to its earlier complaint against the Abbott-Alere deal. Formally the settlement ordered Abbott to divest the the rights and assets of Alere’s diagnostic businesses as follows:
- Epocal Inc (Alere’s epoc Blood Gas Analysis System) would be divested to Siemens ATG.
- Alere’s cardiac marker testing system would be divested to Quidel Corp.
The FTC also ordered divestiture of Alere’s two Ottawa, Canada facilities to Siemens and Alere’s San Diego facility to Quidel, all within 30 days of finalization of the proposed acquisition.
A day after the FTC’s endorsement, Alere Inc announced Abbott’s acquisition of the company would close on October 3, 2017, following the receipt of all regulatory clearances necessary for closing.[6] RT
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