Abbott to Acquire Solvay Pharmaceuticals

Abbott has announced an agreement to acquire Solvay's pharmaceuticals business for 4.5 billion Euro (US$6.6 billion) in cash. The acquisition also includes full global rights to the fenofibrate franchise. Currently, the former has US rights to fenofibrate and pays royalties to the latter.

Belgium-based Solvay Pharmaceuticals will add more than US$3 billion in annual sales, with the majority outside the US. The acquisition will also add approximately US$500 million to Abbott's annual pharmaceutical R&D investment.

The acquisition also includes Solvay's vaccines business, which will provide Abbott entry into the expanding global vaccines market.

The transaction will be approximately US$0.10 accretive to ongoing earnings per share in 2010, accelerating to more than US$0.20 by 2012, increasing thereafter, all before one-time transaction-related items. These one-time transaction-related items are expected to occur between 2010 and 2012. The transaction also includes payments of up to 300 million Euros if certain sales milestones are met between 2011 and 2013.

Abbott plans to fund the transaction with cash currently on the balance sheet.

This transaction is subject to customary closing conditions and regulatory approvals and is expected to close in the first quarter of 2010. As a result, the deal will have no impact on 2009 ongoing earnings per share. The boards of directors of both companies have approved the proposed acquisition.