J&J to buy Abbott Medical Optics for $4.3b.


Johnson & Johnson (NYSE: JNJ), a $74.3b manufacturer of pharmaceuticals, medical devices and consumer healthcare products, has agreed to buy Abbott Medical Optics Inc, a global ophthalmic surgical and eye care products company and a unit of Abbott Labs. The deal greatly expands J&J's $7b eye care segment, by adding ophthalmic products across three business segments -- cataract surgery, laser refractive surgery, and consumer eye health (multipurpose contact lens and other solutions).  Gives J&J the second largest business in cataract surgeries, a $8b global market, growing at ~5% per year.  Eye health is one of the largest, fastest growing and most underserved segments in health care today, according to J&J. The deal, coupled with J&J's leading ACUVUE contact lens business, makes J&J more broadly based and gives it entry into cataract surgery, one of the most commonly performed surgeries and the number one cause of preventable blindness. Abbott is selling AMO due to slow sales, and focusing on deals in faster-growing medical device markets like cardiovascular devices and diagnostics.  In April 2016 Abbott announced an agreement to pay $25b for St. Jude Medical, a maker of heart valves, pacemakers and other cardiovascular-related technology and devices. Abbott also had a deal to buy Alere, Inc. for ~$8b, but is seeking to back out of it. Alere makes diagnostic tests for HIV, tuberculosis, malaria and dengue fever.  Abbott bought AMO in 2009 for $2.8 billion.  Deal value -- $4.3b on $1.1b of revenue


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