$6B deal would be North Chicago firm’s 2nd-largest acquisition

Abbott Laboratories announced Monday morning the purchase of the pharmaceutical business of Belgian plastics and chemical giant Solvay SA for $6.6 billion in cash for the second-largest acquisition in company history.

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A deal between Solvay and Abbott makes sense, analysts said, because the two have a partnership to market cholesterol drugs. Abbott, for example, licenses from Solvay the rights to Tricor, a cholesterol pill that generates more than $1 billion in annual sales. In all, Abbott executives said they will be adding more than $3 billion in annual sales to its total, which approached $30 billion last year.

“We are adding from a position of strength,” Abbott Chairman and Chief Executive Miles White told analysts and investors on a conference call Monday morning.

Solvay also has other drugs to combat heart disease, as well as a small vaccines business and a neuroscience franchise that Abbott sees as a way to help its research initiatives in developing treatments for Parkinson’s and Alzheimer’s diseases. Solvay will add $500 million in annual research and development spending to Abbott’s large budget for drug development.

What’s more, it expands Abbott’s presence globally. White said Monday morning that three-quarters of Solvay’s annual sales come from outside the U.S. and boosts his company’s presence in emerging markets such as India, Russia and Brazil.

“The acquisition of Solvay Pharmaceuticals further diversifies our pharmaceutical portfolio, expands our presence in key high-growth emerging markets, enhances our investment in R&D and accelerates our long-term earnings-per-share growth outlook,” White said.

The deal is the latest example of White’s efforts to keep Abbott competitive. Instead of mega-mergers, White has been able to keep Abbott’s pipeline of drugs and medical devices full through smaller deals.

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The largest acquisition in Abbott’s history will remain its 2001 purchase of Knoll Pharmaceuticals from BASF AG for $6.9 billion. This year, Abbott announced plans to buy heart valve device company Evalve Inc. for about $400 million and eye surgery care company Visiogen Inc. for $400 million.

Source: chicagotribune.com

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