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Abbott Acquires BASF's Pharmaceutical Business for $6.9 Billion

Strategic Insights

— 1 min read

Abbott Laboratories announced the acquisition of the pharmaceutical business of BASF for $6.9 billion in cash, enhancing its global pharmaceutical infrastructure and capabilities. The acquisition will enable Abbott to broaden its global presence, acquire marketed products, and increase its pharmaceutical R&D spending significantly. The deal is expected to be completed in the first quarter of 2001, subject to regulatory approval.

Key Takeaways:

  • Abbott will acquire the pharmaceutical business of BASF for $6.9 billion in cash, expanding its global pharmaceutical infrastructure and capabilities.
  • The acquisition will enable Abbott to broaden its global presence, acquire marketed products, and increase its pharmaceutical R&D spending significantly.
  • The deal includes the global operations of Knoll, including approximately 10,700 employees worldwide, and is expected to have sales of $2.1 billion in 2000.
  • Abbott will also gain access to leading monoclonal antibody technologies and a strong research presence in immunology, including a high-potential product for rheumatoid arthritis.
  • The acquisition complements Abbott's core franchises, including metabolic diseases and pain management, and gives Abbott best-in-class research and manufacturing capabilities.
  • The deal is expected to result in a $0.12 dilution in 2001, but be accretive thereafter, and will be financed through a combination of internal cash resources and external borrowings.

Statistics:

  • The acquisition price of $6.9 billion is equivalent to 7.8 billion euros.
  • The BASF Pharma business employs approximately 10,700 people worldwide.
  • The business is expected to have sales of $2.1 billion or 2.6 billion euros in 2000.
  • Abbott's sales and net earnings were $13.2 billion and $2.4 billion, respectively, in 1999.
  • Abbott's diluted earnings per share were $1.57 in 1999.
  • The acquisition will be completed in the first quarter of 2001, subject to regulatory approval.

Sources:

  • "Abbott Laboratories and BASF Announce Agreement for Abbott to Acquire Pharmaceutical Business" (Dec. 15, 2000)
  • "Abbott Laboratories Reports 1999 Results" (Feb. 22, 2000)
  • "BASF Announces Sale of Pharmaceutical Business to Abbott" (Dec. 15, 2000)
  • "Private Securities Litigation Reform Act of 1995" (Exhibit 99.1 of Abbott's 1999 Form 10-K)

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