GE to buy part of Abbott Labs for over $8 billion

Posted Jan 22nd 2007 1:06PM by Brian White
Filed under: Forecasts, Deals, Products and Services, Competitive Strategy, General Electric (GE)

One of the world's largest companies, General Electric Company (NYSE:GE), will be acquiring some of the medical diagnostics business of Abbott Laboratories for $8.13 billion in cash, according to both companies as as late last week.

What does this move give GE? It will deeply increase the importance GE has been placing recently on its health care business, which right now is pegged at a $16 billion figure for GE annually.

GE CEO Jeff Immelt said the acquisition is "consistent with GE's strategy to invest in high-technology global infrastructure businesses that deliver strong top-line growth, earnings expansion and expanded margins." Easy enough said.

Abbott's partial sale to GE will net the company about $6 billion in after-tax cash according to the company, which will use the money primarily to pay down debt and supplement share repurchases.

Tags: Abbott Labs, Abbott Lbs, AbbottLabs, AbbottLbs, GE, General Electric, GeneralElectric, Jeff Immelt, JeffImmelt