Update: This story has been corrected to reflect the true amount of Abbott's breakup fee. It previously stated the fee was $50 billion.
Abbott ($ABT), which has been dragging its feet on its purchase of Alere ($ALR), may not get off as easily as it hoped. After rejecting Abbott’s $50 million breakup offer in April, Alere is now suing the devicemaker in a bid to force it to complete the acquisition.
The Waltham, MA-based diagnostics player has filed a complaint in Delaware Chancery Court seeking to “compel Abbott to fulfill its obligations under the terms of the merger agreement to take all actions necessary to promptly obtain all required anti-trust approvals,” it said in a statement issued to shareholders Friday.
“Alere will take all actions necessary to protect the interests of Alere shareholders, enforce Alere’s rights under the merger agreement and compel Abbott to complete the transaction in accordance with its terms,” it said in the statement. Alere and Abbott spokespeople did not respond to requests for comment by press time.
The $5.8 billion acquisition was first announced in March, though Abbott soon tried to terminate the deal, citing concerns about a foreign corruption investigation into Alere’s international business practices. Failing to exit the transaction could lead to Abbott’s inheriting the liability for Alere’s alleged misconduct.
In June, Alere said it was confident the deal would go through, even while Abbott, which had “serious concerns” about the accuracy of the financial information Alere submitted in the merger agreement, brought in auditors to go through the diagnostics maker’s books.
Abbott is also trying to acquire fellow devicemaker St. Jude Medical ($STJ) for $25 billion. Credit rating agency Moody’s is skeptical the company can pull off both deals. On the companby’s Q2 earnings call last month, Abbott CEO Miles White affirmed that “everything is tracking well” on the St. Jude deal, but was less forthcoming on Alere. “From our perspective, there has been no change. They still haven't filed a 10-K. Our access to the information has been limited,” White said.
- here's Alere's statement
Abbott affirms progress on St. Jude, Alere acquisitions
Abbott brings in the auditors, but Alere confident deal will go through
Can Abbott afford St. Jude and Alere? Moody's doubts it
Abbott inks $5.8B deal for Alere to expand in point-of-care diagnostics