Abbott-St. Jude $25 billion deal close to clearance
pharmafile | November 16, 2016 | News story | Research and Development, Sales and Marketing |Â Â Abbott, St. Jude, acquisitionÂ
EU antitrust regulators are due to reach a decision on the deal on 23 November that would see Abbott Laboratories purchase St. Jude Medical for a sum of $25 billion. Reuters is reporting that the deal is expected to be given conditional clearance, after speaking to an unnamed source.
CEO of Abbott, Miles White, had spoken as recently as October suggesting that he expects the deal to be completed by the end of the year. On the initial release of the news, he released a statement: “Bringing together these two great companies will create a premier medical device business and Immediately advance Abbott’s strategic and competitive position”.
This statement points towards the appeal of the deal: with St. Jude boasting strong offerings in heart failure devices, atrial fibrillation and cardiac rhythm management, which will complement Abbott’s positions in coronary intervention and transcatheter mitral repair.
The two companies have recently agreed to divest part of their portfolios to Terumo for a purchase price of approximately $1.12 billion. The deal is subject to the clearance of the deal for Abbott to acquire St. Jude and is another step towards easing through the passage of the deal.
Since news was released of the deal between the two companies, St. Jude’s products have suffered from a series of bad press events. With MedSec, a cyber research firm, accusing St. Jude’s heart devices as being vulnerable to being hacked. MedSec claimed that the alleged flaws they discovered could cause the devices to operate at dangerous rates. The FDA is currently investigating the claims. On top of this, St. Jude was forced to withdraw 400,000 heart devices that were at risk of premature battery depletion and were linked with two deaths in Europe. This has not deterred the deal, with Abbott CEO bullish upon St. Jude’s reaction to the press.
Ben Hargreaves
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