Abbott Labs (ABT) to Acquire Advanced Medical Optics (EYE) for $2.8B; Offers FY08, FY09 Outlook

January 12, 2009 8:15 AM EST

Abbott Labs (NYSE: ABT) affirmed its FY08 EPS guidance of $3.31-$3.33, ex-items, versus the consensus of $3.32. For FY09, Abbott sees EPS of $3.65-$3.70, versus the Street estimate of $3.66.

Separately, Abbott announced today a definitive agreement for Abbott to acquire Advanced Medical Optics Inc. (NYSE: EYE) for $22 per share in cash, for a total transaction value of approximately $2.8 billion, inclusive of estimated net debt at the time of closing. Based in Santa Ana, Calif., AMO is a global leader in ophthalmic care, comprised of three segments: cataract surgery, laser vision correction (LASIK), and eye care products. Globally, AMO holds the number one position in LASIK surgical devices, the number two position in the cataract surgical device market and the number three position in contact lens care products.

Under the terms of the agreement, Abbott will commence a tender offer by Jan. 26, 2009, to purchase all outstanding shares of AMO at $22 per share. The tender offer is conditioned on the tender of a majority of the outstanding shares of AMO's common stock on a fully diluted basis. The $2.8 billion estimated value of the transaction is based on AMO's approximately 62 million fully diluted shares outstanding, plus estimated net debt at the time of closing. The Boards of Directors of AMO and Abbott have approved the transaction.

Abbott expects the transaction to be neutral to ongoing EPS in 2009, and accretive beginning in 2010, both before one-time transaction-related costs, which will be provided at a later date.

Abbott Laboratories engages in the development, manufacture, and sale of health care products worldwide.

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