Sector News

Abbott, St. Jude Medical plans to sell $1.1 Billion in assets

October 19, 2016
Life sciences

Abbott Laboratories and St. Jude Medical Inc., in the midst of a merger, said Tuesday they would sell certain businesses to Japanese medical-equipment maker Terumo Corp. for about $1.1 billion as the two American companies march toward completing their tie-up.

St. Jude Medical’s stock rose 1.3% to $78.66 in premarket trading, and Abbott shares were up 1.6% at $41.22.

The companies said they plan to sell a portion of their vascular closure and electrophysiology businesses to Terumo after the St. Jude Medical-Abbott transaction closes. No sale would occur if the planned merger were to fall apart.

The divestiture, an all-cash transaction, will include St. Jude Medical’s Angio-Seal and Femoseal vascular-closure products and Abbott’s Vado steerable sheath. Abbott will retain its vascular-closure products.

Abbott agreed in April to buy St. Jude Medical in a cash-and-stock transaction then valued at $25 billion, a way to bulk up its medical-devices business to better compete against rivals Medtronic PLC and Boston Scientific Corp. Abbott anticipates the deal closing by the end of the year.

By Joshua Jamerson

Source: Wall Street Journal

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