GE, Abbott Nix Proposed $8B Deal

GE and Abbott said on Wednesday they had terminated a proposed $8 billion deal for GE to buy two Abbott businesses because they couldn’t agree on final terms. Abbott (Charts, Fortune 500) shares fell about 3.7 percent in aftermarket trade. GE (Charts, Fortune 500), one of the world’s biggest companies, said in January that it would buy two of Abbott’s medical diagnostics subsidiaries for $8.1 billion in cash. The sale would have been a boon for Chicago area-based Abbott, which was expected to use the proceeds to pay down debt and buy new products. An analyst had said at the time the deal was announced that Abbott had got $2 billion more than expected for the units. Abbott’s $3.7 billion purchase of Kos Pharmaceuticals earlier this year has increased its debt burden. Tepid growth in GE’s healthcare business is likely to keep a lid on overall growth in the second-quarter, according to Deutsche Bank. GE, based in Fairfield, Connecticut, is expected to post quarterly results on Friday. One of the Abbott businesses to have been sold was involved in in-vitro diagnostics and the other performed bedside tests on patients in areas such as blood chemistry. By selling the two diagnostic units, while holding on to its faster-growing diabetes and molecular diagnostics businesses, Abbott had hoped to bolster its strategy of steadily boosting overall profit margins. In a statement, Abbott said second-quarter, 2007 and 2008 forecasts, excluding special items, remained unchanged. Abbott will release its financial results on July 18. SOURCE: Reuters