The deal comes as Abbott continues to move forward with its $25 billion purchase of St. Jude Medical and wrangle legally with Alere over a previously planned $6 billion merger.
Abbott Laboratories will sell its vision care business, Abbott Medical Optics, to Johnson & Johnson for more than $4 billion, the companies said Friday.
The $4.325 billion deal is expected to close in early 2017 pending customary closing conditions, including regulatory approvals. Abbott's vision care business has products for cataract surgery, laser vision correction (LASIK), and corneal care. It boasts world-class intraocular lenses used in cataract surgery.
However, Abbott has been strategically focused on developing leadership positions in cardiovascular devices and expanding diagnostics, CEO Miles White said in a news release. Abbott is in the process of acquiring St. Jude Medical and its extensive cardiovascular device portfolio for $25 billion. It also previously planned to acquire diagnostics company Alere for about $6 billion, but has apparently gotten cold feet after Alere disclosed a federal grand jury subpoena related to a U.S. Foreign Corrupt Practices Act investigation. The Abbott-Alere deal is now heading into legal mediation.
Meanwhile, Johnson & Johnson sees an opportunity to expand its offerings in eye care--an area that Ashley McEvoy, company group chairman for J&J's vision care companies, describes as "one of the largest, fastest growing and most underserved segments in health care today."
"With the acquisition of Abbott Medical Optics' strong and differentiated surgical ophthalmic portfolio, coupled with our world-leading Acuvue contact lens business, we will become a more broad-based leader in vision care," McEvoy said in a news release. "Importantly, with this acquisition we will enter cataract surgery--one of the most commonly performed surgeries and the number one cause of preventable blindness."
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[Image courtesy of Abbott Labs]