May 2, 2016
Abbott Laboratories, headquartered near Chicago, has announced that it will buy St. Jude Medical Inc. in a deal worth $25 billion. The company wants the Minnesota-based St. Jude Medical to boost its heart device business.
The proposed deal, however, has generated some controversy, with investors and analysts worrying about the potential payoff. Abbott says that the St. Jude’s devices will complement its own cardiovascular products. Furthermore, the company believes that the buy will help it compete more effectively against larger rivals.
As part of the deal, Abbott said it would take on or refinance about $5.7 billion of St. Jude’s net debt. It sees $500 million in cost savings by 2020.