Abbott Labs to buy diagnostics company Alere for $5.8 billion
By Ankur Banerjee and Rosmi Shaji
(Reuters) - Abbott Laboratories (ABT.N: Quote) said it would buy Alere Inc (ALR.N: Quote) for $5.8 billion to become a leader in point-of-care testing, a fast-growing market as physicians increasingly adopt rapid tests that speed up treatment.
Point-of-care tests provide results to doctors in a matter of minutes as they can be conducted in the physician's office, an ambulance or even at home.
Waltham, Massachusetts-based Alere, which has annual sales of $2.5 billion, makes tests for infections such as HIV, tuberculosis, malaria and dengue.
The deal comes at a time when deadly viruses such as Zika are spreading alarmingly across the globe, putting the spotlight on diagnostic test makers and vaccine developers.
It was not immediately clear if Alere or Abbott were involved in making tests for Zika, which has been linked to severe birth defects in babies.
"We view the deal positively as we think point-of-care testing is the fastest growing segment in the diagnostic market," S&P Capital IQ analyst Jeffrey Loo said.
The global diagnostics industry, which is roughly $60 billion in size, is growing at a rate of 5 percent, according to Goldman Sachs.
Abbott will pay $56 per share in cash, a premium of about 51 percent to Alere's Friday closing. Alere shares were trading at $53.95 on Monday. Abbott was down 0.7 percent. Continued...