19 Jan GE acquisition may boost "early" healthcare strategy
Waukesha, Wis. – GE Healthcare’s efforts to create an “early” healthcare model should be enhanced with General Electric Co.’s pending acquisition of Abbott Laboratories’ in-vitro diagnostics and point-of-care diagnostics business units, according to GE executives.
GE and Abbott announced that they have entered into a definitive agreement for GE, the parent GE Healthcare, to acquire the Abbott’s core laboratory diagnostics business units for $8.13 billion in cash.
The transaction, which is subject to regulatory approvals, will contribute to the development of GE Healthcare’s “early health” model of care, which will attempt to leverage information technology and early diagnosis to provide pre-symptomatic disease detection and disease prevention.
The transaction also will enable to GE Healthcare, a $16.6 billion medical imaging company with facilities in Waukesha, to broaden its diagnostic offerings, which include in vivo diagnostic imaging systems.
Abbott, based in Abbott Park, Ill., develops medical diagnostic instruments and tests. GE Chairman and CEO Jeffrey R. Immelt called Abbott’s diagnostics business “the premier platform in this industry” and said its position in diagnostics is aligned with GE’s overall healthcare strategy.
Abbott employs about 12,000 people at the affected business units, and they are expected to generate approximately $2.7 billion in 2006 sales.
Jim Leonhart, executive vice president of the Wisconsin Biotechnology and Medical Device Association, noted the two companies are only 70 miles apart. He called the acquisition a union of two “tremendously complementary” businesses, characterizing Abbott’s diagnostic units as “kind of a plug in” to GE Healthcare’s diagnostic prowess.
“It does really speak to some of the regional cooperation that we’ve always thought needs to be one of our strengths,” he said.
Abbott and Wisconsin
It is not known how, if at all, the transaction will impact Abbott’s plans to develop a facility in Wisconsin. Last year, Abbott acquired 500 acres of land in Kenosha County, just across the Wisconsin state line, for what could be a major expansion. At the time, some technology observers believed the company, which has been mum on its specific plans, wanted to create synergies with the state’s biotech industry and research institutions.
But Abbott also has taken some hits here, as it did when a Wisconsin jury found that it infringed, although not willfully, on a patent held by the Belgian-based biopharmaceutical firm Innogenetics, and imposed a $7 million fine. The fine recently was upheld by the U.S. District Court for the Western District of Wisconsin.
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