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Abbott completes $25 billion deal for St. Jude

pharmafile | January 9, 2017 | News story | Sales and Marketing Abbott, St. Jude 

It has been announced that the Federal Trade Commission has approved Abbott Laboratories acquisition of St. Jude Medical for $25 billion, in a deal that was announced back in April 2016. The deal can be broken down to $13.6 billion in cash and further $10 billion in Abbott common stock whilst taking on $5 billion of St Jude’s debt. The cash delivered up front as part of the deal will be financed by Abbott taking on further debt.

The combined companies will have a vast portfolio of medical devices, nutritional products and drugs that bring in steady revenue, Abbott had $20.4 billion in annual revenue last year whilst St. Jude drew in $5.5 billion in sales of advanced medical devices. The challenge for the two companies will be two both merge their respective company identities and to maintain sales to work down its debt. The steady sales of medicals devices, such as pacemakers and stents, will allow Abbott to innovate in other areas with faster growth, such as products to treat heart-valve diseases.

The usual by-product of a merger of this size is the rocky area of initially finding synergies and cutting administrative costs. The usual result is the loss of jobs and there has been so far no word on St. Jude 18,000 employees.  Miles White, in his statement was keen to stress Abbott’s track record of smoothly integrating businesses.

“Abbott has a strong track record of successfully integrating dozens of businesses on a global scale and accelerating growth,” said White, chairman and chief executive officer of Abbott Laboratories. “The addition of St. Jude Medical strengthens our global medical device leadership while offering innovative products to address more areas of care, in more physicians’ offices and hospitals around the world.”

Ben Hargreaves

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