Under the merger agreement, St. Jude Medical will now be a wholly-owned subsidiary of Abbott, with its last day of trading on the NYSE ending today.
“Abbott has a strong track record of successfully integrating dozens of businesses on a global scale and accelerating growth. The addition of St. Jude Medical strengthens our global medical device leadership while offering innovative products to address more areas of care, in more physicians’ offices and hospitals around the world,” Abbott CEO & chair Miles White said in prepared remarks.
Abbott touted the acquisition, saying it would position the combined entity to cover “nearly every area” of the cardiovascular market, holding onto the number 1 or 2 positions “across large and high-growth cardiovascular device markets.”
The combined company’s cardiovascular and neuromodulation portfolio has reported annual sales of approximately $8.7 billion, the companies said. Abbott expects the acquisition to be accretive, expecting 21¢ of accretion in 2017 and 29¢ in 2018.
China’s Ministry of Commerce said the approval is conditioned on the sale of St. Jude’s small vessel closure device business; the companies would have 20 days from the close of their deal to execute the sale of the vascular closure unit and related assets, according to an online translation of the announcement.
Abbott and St. Jude have already arranged to sell off those assets and others to Terumo (TYO:4543) for approximately $1 billion. That deal calls for St. Jude to deal its Angio-Seal and Femoseal vascular closure assets, including a manufacturing plant in Puerto Rico; Abbott is due to divest the Vado steerable sheath it bought with the acquisition of Kalila Medical last year.
The Chinese regulators said their review of that transaction found that the Terumo deal would fix their anti-trust concerns. Last week, their U.S. counterparts agreed when the Federal Trade Commission likewise conditionally approved the deal.
Abbott has said it plans to pay for the deal with cash on hand and a $15.1 billion debt offering. The Abbott Park, Ill.-based healthcare giant floated $2.85 billion in 2.35% senior notes due in 2019; $2.85 billion in 2.9% notes due 2021; $1.5 billion in 3.4% notes due 2023; $3.0 billion in 3.75% notes due 2026; $1.65 billion in 4.75% notes due 2036; and $3.25 billion in 4.9% notes due 2046.