Deals and IPOs

Alere says it rejected Abbott's request to end merger deal


Diagnostic test maker Alere said its board has rejected a recent request by Abbott Laboratories to terminate the $5.8 billion deal to buy Alere for a breakup fee.

However, Abbott said it has arranged committed financing for the Alere deal as well as its latest deal to buy St Jude Medical Inc for $25 billion.

Miles White
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Abbott had raised concerns about the accuracy of various representations, warranties and covenants made by Alere in the merger agreement, and offered to pay $30 million to $50 million to terminate the deal, Alere said on Thursday.

Alere, which is being investigated by the U.S. government over its sales practices, said it was confident that "there is no basis for the termination of the merger agreement" and expects the deal to be completed according to its terms.

The company, which makes tests for infections such as HIV, tuberculosis, malaria and dengue, also said it got approval from it lenders for an extension to file its annual report pending an accounting review.

Abbott Chief Executive Miles White last week had declined to respond directly when asked whether he would reaffirm Abbott's commitment to the $5.8 billion deal, fueling speculation the deal might not close.

Abbott in February agreed to buy Alere, aiming to become the leader in point-of-care diagnostic testing, a market that is growing as physicians increasingly adopt rapid tests that speed up treatment.