Abbott has agreed to acquire Alere for $5.8 billion, the companies said today, in a deal that will transform the buyer into a top diagnostics developer.

“The combination of Alere and Abbott will create the world's premier point of care testing business and significantly strengthen and grow Abbott's diagnostics presence,” Miles D. White, Abbott’s chairman and CEO, said in a statement. “We want to offer our customers the best and broadest diagnostics solutions. Alere helps us do that.”

Abbott said its total annual diagnostics sales will exceed $7 billion once the deal closes. The combined business says it will offer the broadest point of care menu of infectious disease, molecular, cardiometabolic, and toxicology testing, as well as expand Abbott's platforms to include benchtop and rapid strip tests.

Headquartered in MA, Alere has annual sales of $2.5 billion and nearly 10,000 employees worldwide. Alere delivered more than 1.4 billion tests at the point of care in 2015—including doctors' offices, clinics, pharmacies, and in homes—which according to the company makes it the global leader in point of care diagnostics.

“Our leading platforms and global presence in point-of-care diagnostics, combined with Abbott's broad portfolio of market-leading products, will accelerate our shared goal of improving patient care,” added Alere President and CEO Namal Nawana.

Abbott said the acquisition will enable it to add complementary tests from Alere to its offerings, as well as expand into new channels and regions of the world. While Alere generates more than half its sales in the U.S., the company also has a growing presence overseas that Abbott reasons it can grow further.

Abbott said the deal will immediately add to its earnings per share by approximately 12 to 13 cents in 2017, and more than 20 cents in 2018.

Abbott also cautioned that the combined company will generate annual pre-tax cost savings or “synergies” that approach $500 million by 2019 and increase thereafter, including in sales and operations.

At $56 per share, the deal price represents a nearly 51% premium over Alere’s closing share price of $37.20 on Friday.

Abbott also agreed to assume or refinance Alere’s net debt, now at $2.6 billion.

The transaction has been approved by the boards of both companies, and is subject to the approval of Alere shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.

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