GE offers $8.13 billion for Abbott Diagnostics

January 19, 2007

Rumors of a pending deal between GE Healthcare and Abbott Laboratories proved true yesterday with the announcement of GE’s offer to pay $8.13 billion for two of Abbott’s medical diagnostics divisions. If the deal goes through in the first half of 2007 as expected, GE will add in vitro and point-of-care diagnostics, including blood and urine tests, to its portfolio.

Rumors of a pending deal between GE Healthcare and Abbott Laboratories proved true yesterday with the announcement of GE's offer to pay $8.13 billion for two of Abbott's medical diagnostics divisions. If the deal goes through in the first half of 2007 as expected, GE will add in vitro and point-of-care diagnostics, including blood and urine tests, to its portfolio.

The purchase of an in vitro diagnostics company has long been in the cards for GE. Before playing that hand, however, GE wanted to buy an in vivo company, according to GE Healthcare president and CEO Joe Hogan, a requisite the company fulfilled with its $9.5 billion purchase of Amersham in 2004.

"My thought was to do the in vivo molecular diagnostic piece first, to obtain the chemistry and biological understanding and clinical trial expertise," he told Diagnostic Imaging Scan. "By doing that, I feel we can bring the in vitro in on top of a much better platform and have a better understanding of how all the pieces fit together."

The proposed acquisitions would complement GE Healthcare's life sciences and medical diagnostics business units, created in the wake of the company's purchase of Amersham. Life sciences focuses on technologies that help predict, diagnose, and treat diseases early. The medical diagnostics business concentrates on in vivo imaging agents.

GE's acquisition of Abbott's two diagnostics divisions would be the second such closing in 2007. On Jan. 1, Siemens Medical Solutions officially acquired the diagnostics division of Bayer for $1.9 billion. This deal was a follow-up to the company's acquisition of Diagnostic Products at midyear 2006.

For complete coverage of the latest event and an exclusive interview with GE Healthcare president Joe Hogan, please visit DI SCAN, a subscription-based online business publication with news and analysis of events in the global medical imaging industry.