NEW BRUNSWICK, NJ–Hub City healthcare giant Johnson & Johnson (J&J) said on September 16 it will spend $4.33 billion in cash to acquire Abbott Medical Optics (AMO), based in Santa Ana, California.
J&J said the deal will help “strengthen global leadership in eye health adding cataract and refractive eye surgery to [our] vision care” holdings and consumer eye health units.
The investment will include eye care products in cataract surgery, laser refractive surgery and consumer eye health, said J&J.
AMO, a subsidiary of Chicago-based Abbott Laboratories, and global leader in ophthalmic surgery reported gross sales of $1.1 billion last year.
“Eye health is one of the largest, fastest growing and most underserved segments in health care today,” said Ashley McEvoy, Company Group Chairman at J&J Vision Care.
“With the acquisition of [AMO] … coupled with our world-leading ACUVUE contact lens business, we will become a more broad-based leader in vision care. With this acquisition we will enter cataract surgery – one of the most commonly performed surgeries and the number one cause of preventable blindness.”
The World Health Organization estimates that about 20 million people are blind from age-related cataracts and that there are at least 100 million eyes with compromised visual acuity caused by cataracts, said J&J.
The company said those “numbers are steadily rising due to population growth and increasing life expectancy.”
AMO’s consumer eye health products, including over-the-counter drops for dry eyes and multi-purpose solutions, will go to J&J in the deal, it said.
Abbott’s optics unit is “a self-contained business and had very little synergy with anything else in their device portfolio,” Debbie Wang, an analyst at Morningstar, told Bloomberg News.
And Abbott wants to steer its medical device unit “down the path of these more sophisticated products,” Wang told Bloomberg.
St. Jude Medical Inc., the leading manufacturer of devices to treat heart failure, and a company Abbott is currently purchasing for $25 billion, could surely drive that objective.
“We’ve been actively and strategically shaping our portfolio, which has recently focused on developing leadership positions in cardiovascular devices and expanding diagnostics,” said Miles White, Abbott Chief Executive.
The transaction is expected to close in the first quarter of 2017, said J&J, indicating that “the closing is subject to antitrust clearance and other customary closing conditions.”
“Following the expected closing, sales will be reported in the Medical Devices segment as a separate platform within Vision Care.”
Dave is an award-winning business reporter who has authored over 200 articles for New Brunswick Today.