Abbott to close $25B St. Jude buy

Abbott (NYSE:ABT) said today that it plans to close its $25 billion buy of St. Jude Medical (NYSE:STJ) next Wednesday, Jan. 4, after receiving all necessary regulatory clearances for the deal.

Abbott touted the acquisition, saying it would position the combined entity to cover “nearly every area” of the cardiovascular market, holding onto the number 1 or 2 positions “across large and high-growth cardiovascular device markets.”

The combined company’s cardiovascular and neuromodulation portfolio has reported annual sales of approximately $8.7 billion, the companies said. Abbott expects the acquisition to be accretive, expecting 21¢ of accretion in 2017 and 29¢ in 2018.

“We continue to deliberately shape our business for long-term success by securing leadership positions in attractive markets and focusing on customer needs. This philosophy has served as the foundation for significant and sustainable value creation for our shareholders. The addition of St. Jude Medical creates one of the broadest medical device portfolios in the world and provides a steady stream of new technologies and therapies for many years to come,” Abbott CEO Miles White said in prepared remarks. “Customers today w ant partners who offer breakthrough technologies along with a broad portfolio of solutions to help them better care for their patients. Our powerful and complementary medical device portfolio and industry-leading new product pipeline will help us be that partner, uniquely positioning us to win in the marketplace.”

Just yesterday, anti-trust regulators in China granted conditional approval to the tie-up.

China’s Ministry of Commerce said the approval is conditioned on the sale of St. Jude’s small vessel closure device business; the companies would have 20 days from the close of their deal to execute the sale of the vascular closure unit and related assets, according to an online translation of the announcement.

Abbott and St. Jude have already arranged to sell off those assets and others to Terumo (TYO:4543) for approximately $1 billion. That deal calls for St. Jude to deal its Angio-Seal and Femoseal vascular closure assets, including a manufacturing plant in Puerto Rico; Abbott is due to divest the Vado steerable sheath it bought with the acquisition of Kalila Medical earlier this year.

The Chinese regulators said their review of that transaction found that the Terumo deal would fix their anti-trust concerns. Earlier this week, their U.S. counterparts agreed when the Federal Trade Commission likewise conditionally approved the deal.

Earlier this month, anti-trust regulators in India cleared the $25 billion tie-up, weeks after regulators in Europe cleared the deal.

Abbott has said it plans to pay for the deal with cash on hand and a $15.1 billion debt offering. The Abbott Park, Ill.-based healthcare giant floated $2.85 billion in 2.35% senior notes due in 2019; $2.85 billion in 2.9% notes due 2021; $1.5 billion in 3.4% notes due 2023; $3.0 billion in 3.75% notes due 2026; $1.65 billion in 4.75% notes due 2036; and $3.25 billion in 4.9% notes due 2046.

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