Abbott (NYSE:ABT) reportedly agreed to go through with its plan to acquire diagnostics giant Alere (NYSE:ALR), but at the much lower price of $4.4 billion.
Originally priced at $5.8 billion when it was announced in February 2016, the deal ran into trouble right out of the gate as a string of setbacks befell Alere. By December 2016 Abbott had sued to stop the merger , citing a “substantial loss in Alere’s value” due to “a series of damaging business developments.”
Citing people close to the matter, the Financial Times reported that Abbott agreed to pay $51 per share, representing a -8.9% haircut but still a 21% premium on Alere’s $42.31 closing price yesterday. Anti-trust regulators in the European Union approved the merger in January, contingent on Abbott selling some of Alere’s Epoc and Triage tests and its BNP reagents business. Abbott also agreed to sell plants in Ottawa and San Diego to mollify the European Commission.
Soon after the deal became public last year, Alere received a subpoena from the U.S. Justice Dept. seeking documents on its dealings with 3rd-party distributors and foreign healthcare officials, and the company said it wouldn’t be able to meet the deadline for reporting its 2015 results. By April 2016 Alere had rejected a $50 million offer from Abbott to spike the merger; last July the DoJ initiated another probe into Alere’s billing practices for pain management payments from government insurance programs.
Alere sued Abbott last August, looking to force its would-be acquirer to obtain all antitrust approvals required to complete the acquisition. In early September, a Delaware state court put the lawsuit on the fast track and urged the companies to try and talk things out; an attempt at mediation failed later that month.
Abbott filed a counter-suit in December 2016, the same day that the Centers for Medicaid & Medicare Services revoked enrollment for Alere’s Arriva diabetes division after finding that it submitted claims for 211 deceased patients.
Abbott closed the $25 billion acquisition of St. Jude Medical in January.
Material from Reuters was used in this report.
The post Report: Abbott agrees to lower, $4B price for Alere appeared first on MassDevice.
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