Abbott to buy medical device maker St. Jude Medical for $25 bn
28 April 2016
Abbott Laboratories today struck a deal to buy medical device maker St Jude Medical Inc for $25 billion in order strengthen its heart and neurological devices business.
Under the terms of the deal, St. Jude shareholders will receive $46.75 in cash and 0.8708 Abbott shares - a total of about $85 per share.
The offer represents a 37 per cent premium to St. Jude's yesterday closing price, and at an Abbott stock price of $43.93, the deal represents a total transaction equity value of $25 billion.
Abbott will assume or refinance St. Jude's net debt of about $5.7 billion and intends to fund the cash portion of the transaction with medium-and long-term debt.
Founded in 1976 and based in St. Paul, Minnesota, St Jude Medical, which is named after Jude the Apostle, is a medical device maker focused on six key treatment areas - heart failure, arrhythmias, vascular disease, structural heart, chronic pain, and neurological diseases.
It manufactures implantable cardioverter-defibrillators, pacemakers, electrophysiology catheters; vascular closure products; cardiac mapping and visualization systems, optical coherence tomography imaging systems; structural heart repair products, and neurostimulation devices.
It has more than 20 operations and manufacturing facilities worldwide and its products are sold in more than 100 countries.
Its major markets include the US, Europe, Latin America and Asia-Pacific,and has annual sales of around $5.6 billion.
St. Jude Medical's strong positions in heart failure devices, atrial fibrillation and cardiac rhythm management will complement Abbott's leading positions in coronary intervention and transcatheter mitral repair.
Abbott's cardiovascular device unit will have annual sales of $8.7 billion after the business are combined and will hold the No 1 or 2 positions across this market, which is expected to grow to $30 billion.
"Bringing together these two great companies will create a premier medical device business and immediately advance Abbott's strategic and competitive position," said Miles White, chairman and CEO of Abbott. "The combined business will have a powerful pipeline ready to deliver next-generation medical technologies and offer improved efficiencies for health care systems around the world."
"Today's announcement is an exciting next chapter for St. Jude Medical, bringing together two industry leaders with a shared passion for innovation, culture and patients," said Michael Rousseau, St. Jude Medical president and CEO.