Free Newsletter
GE negotiating for Abbott diagnostics unit
Several news reports have surfaced that General Electric is close to a deal to buy the diagnostics unit of Abbott Laboratories for about $5 billion. A deal would greatly increase the size of GE's healthcare business, which has been focused on expanding its presence in IT as well as molecular diagnostics.
- read the AP's report on the talks
Related Articles:
JPMorgan, GE make healthcare acquisitions. Report
Abbott documents reveal plan to boost AIDS drug sales. Report
Comments
By Dheeman Vaidya | Posted 12:27am | January 19, 2007
Comments from respective companies might not surface for sometime due to the ongoing due deligence. However, acquiring Abbott makes sense for GE with the following considerations;
1. Siemens acquires DPC & Bayer Diagnostics to become the only totally integrated diagnostics company with In Vivo & In Vitro capabilities.
2. The value chain for healthcare delivery is migrating towards much more holistic delivery of services.
3. Siemens to leverage its imaging strength and amalgmate with immuno & molecular diagnostics towards new molecular imaging Dx as well as LIS/ HIS.
4. Abbott is the world leader in Immunodiagnostics with its Architech platform & has a fair presence in Molecular Dx with Vysis platform.
5. Abbott acquisition will provide GE an edge over its arch-rival Siemens.
However, one needs to consider the emerging under-currents in the global pharma sector after experiencing the onslaught of generic competition, shrinking pipelines & reducing block-busters. The big pharma companies are either focusing on the niche-busters i.e. biotech & specialized therapeutics OR clinging on to Medical Devices & Diagnostics. These are the two business options with higher entry barriers.
Abbott has recently consolodited on its strategic roadmap towards Med Devices & Dx with Guidant Acquisition. Hence, any decision of let go the future growth avenue & 3rd largest segment among Devices & Dx i.e. Dx will be a choice well thought & weighed. The benefits for the sell of Dx unit would be far more bigger & strategic in nature for Abbott.
SHARE
WITH: