By Jof Enriquez,
Follow me on Twitter @jofenriq
Abbott Laboratories has formally completed its $25 billion acquisition of St. Jude Medical to add a chronic pain management business and significantly bolster its cardiovascular device offerings. The deal makes St. Jude a wholly-owned subsidiary of Abbott, which is now considered a major player in the $30 billion cardiovascular space, competing with market stalwarts like Medtronic and Boston Scientific.
U.S. anti-trust regulators last month gave the thumbs up to the deal after Abbott agreed to sell its Vado steerable sheath and St. Jude agreed to sell its Angio-Seal and Femoseal vascular closure products to Japanese medical device company Terumo, for a combined $1.12 billion in cash.
St. Jude in recent months had to deflect allegations that its cardiac implants were prone to cyberattacks, and had to deal with a U.S. Food and Drug Administration (FDA) warning that batteries in some of its implantable cardioverter defibrillators (ICDs) drain faster than expected. Abbott CEO Miles White told analysts in October that he was satisfied with how St. Jude handled the issues, and expected the deal to close by the turn of the year, as planned.
In a statement following this week's completion of the acquisition, Miles said, "Abbott has a strong track record of successfully integrating dozens of businesses on a global scale and accelerating growth. The addition of St. Jude Medical strengthens our global medical device leadership while offering innovative products to address more areas of care, in more physicians' offices and hospitals around the world."
St. Jude's strong portfolio in atrial fibrillation, heart failure, structural heart, and chronic pain will complement Abbott's strong positions in coronary interventions and mitral valve disease, according to a news release. Together, the combined company will compete in nearly every area of the competitive $30 billion cardiovascular market, and hold the No. 1 or 2 positions across large and high-growth cardiovascular device markets.
With the merger, Abbott gets St. Jude's chronic pain management business, which, along with the combined cardiovascular units, now represents about one-third of Abbott's total business, Abbott spokeswoman Darcy Ross told the Chicago Tribune.
St. Jude CEO Michael Rousseau is slated to become president of Abbott's cardiovascular and neuromodulation division, according to a securities filing, reports the Star Tribune. Other top executives at St. Jude reportedly signed retention agreements with Abbott, although their exact roles will only be defined after the transition.
"St. Jude has a strong management team and we are pleased to have many leading the business moving forward," Abbott spokeswoman Elissa Maurer told the Star Tribune via e-mail. "We continue to have integration teams from both companies working through plans to combine our businesses and ensure a smooth transition. We don't have further details at this time."