Abbott Seals Alere Deal at Lower Price, Ending Legal Battle
April 14, 2017
By Alex Keown, BioSpace.com Breaking News Staff
CHICAGO – Abbott and Alere Inc. have come to an accord. The Illinois-based Abbott will acquire Alere for an amount less than the initially agreed upon $5.8 billion.
This morning diagnostic-testing company Alere announced that Abbott will acquire the company for $5.3 billion, about $51 per share. Shares of Alere closed at $42.31 on Thursday, but rose slightly in after-hours trading. The market is closed today in observance of Good Friday.
The reduced price ends a legal battle that in December saw Abbott seeking to abort its bid to acquire the company following concerns raised over billing incidents that caused Alere’s diabetes unit, Arriva Medical, to be removed from Medicare. Abbott also raised concerns over the recall of a product, the delay in filing its form 10-K with the U.S. Securities and Exchange Commission and investigations into its business practices by the U.S. government. In its filing, Abbott questioned Alere’s internal business controls and lack of transparency.
The agreement ends a 14-month process that started in February 2016 when the two companies initially agreed to Abbott’s acquisition of Alere. As part of the acquisition, Alere said both companies are ceasing the lawsuits filed against each other over the acquisition.
The December filing by Abbott was not the first time the company indicated it had reservations about acquiring Alere, a leader in point of care diagnostics. At the end of October 2016, Abbott filed a breach of contract lawsuit against Alere regarding documentation the company said has been withheld ahead of the merger. In a SEC filing, Alere alluded to legal action the company was taking against Abbott over the deal, including an August claim that Abbott was failing to comply with its obligations set forth in the merger agreement related to antitrust approvals.
When Abbott proposed the acquisition, it said Alere would allow the company to “provide new, flexible, cost-effective, high-quality products to help health systems meet growing demand in both in-patient and out-patient settings.” At the time the company said Alere’s portfolio of products will provide the company entry into new outlets, including doctors' offices, clinics, pharmacies and at-home testing. Abbott said its combination with Alere will offer the broadest point of care menu of infectious disease, molecular, cardiometabolic and toxicology testing, expanding Abbott's platforms to include benchtop and rapid strip tests.
Abbott’s acquisition of Alere is expected to close by the end of the third quarter pending approval from shareholders and regulatory authorities.
Shares of Abbott closed at $42.67 on Thursday.