BREAKING: Abbott to pay $25B for St. Jude Medical

Abbott (NYSE:ABT) said today that it offered to pay a 37% premium for St. Jude Medical (NYSE:STJ) in a $25 billion deal aimed at expanding its cardiac and neurological businesses.

Each unit in the $85-per-share deal consists of $46.75 in cash and 0.8708 ABT shares; at Abbott’s 5-day volume weighted average share price of $43.93 as of April 26, the buyout is worth about $25 billion.

That’s a 37% premium on yesterday’s closing price of $61.97 for STJ shares; the stock was up 27.1% to $78.76 in pre-market trading this morning. ABT shares were down -5.5% to $41.45. 

The companies said the union will create a “best-in-class” competitor in nearly all segments of the cardiovascular market with the 1st or 2nd position “across large and high-growth cardiovascular device markets” with combined annual sales of about $8.7 billion. The deal also calls for Abbott to assume or refinance St. Jude’s $5.7 billion in net debt.

“Bringing together these 2 great companies will create a premier medical device business and immediately advance Abbott’s strategic and competitive position,” Abbott chairman & CEO Miles White said in prepared remarks. “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 2 industry leaders with a shared passion for innovation, culture and patients,” added St. Jude president & CEO Michael Rousseau. “Our combined scale will expand the global reach, competitiveness and impact of our medical device innovation for physicians and hospitals. This transaction provides our shareholders with immediate value and the opportunity to participate in the significant upside potential of the combined organization. I’d like to thank our 18,000 employees whose hard work and commitment help us deliver leading medical technologies to patients around the world.”

Abbott said it expects the transaction to add 21¢ to adjusted earnings per share in 2017 and 29¢ the next year.

Material from Reuters was used in this report.

The post BREAKING: Abbott to pay $25B for St. Jude Medical appeared first on MassDevice.

from MassDevice http://ift.tt/26wKPQZ