Abbott (NYSE:ABT) is deliberately stalling with federal anti-trust regulators, hoping to snuff the pending, $5.8 billion buyout of Alere (NYSE:ALR), according to a lawsuit unveiled this week in a Delaware state court.
Waltham, Mass.-based Alere, which revealed the lawsuit last week, alleged that Abbott evaded a 2nd request for information on the tie-up from the Federal Trade Commission and accused CEO Miles White of threatening to make life a “living hell” for Alere if it didn’t walk away from the deal.
Abbott “inundated” the diagnostics company with some 175 document requests and more than 40 interviews in a quest to find valid reasons to squelch the merger, according to the complaint filed in the Delaware Chancery Court. Abbott dragged its heels on complying with the 2nd FTC request as a back-up plan, the lawsuit alleges.
The Abbott Park, Ill.-based healthcare titan, which has another major acquisition iron in the fire – a $25 billion deal for St. Jude Medical (NYSE:STJ) – denied the lawsuits claims, blaming Alere’s financial woes and delayed financial statements for hindering the closing. An Alere whistleblower has also approached Abbott with allegations that Alere is concealing information about its business in India by coaching witnesses to lie.
“Alere’s complaint is nonsense and without merit,” Abbott said in a statement. “Their description of events is fiction and nothing but a publicity stunt. Abbott is compliant with its obligations under the merger agreement.”
The merger ran into trouble soon after it was announced in February, when the U.S. Justice Dept. subpoenaed documents on Alere’s sales practices in Africa, Asia and Latin America under the Foreign Corrupt Practices Act. Alere later rejected a $50 million kill fee from Abbott and was confronted with a securities fraud lawsuit accusing it of artificially inflating share prices ahead of announcing the merger.
Material from Reuters was used in this report.
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