Abbott acquires drugs unit for $6.5 billion

Abbott Laboratories has acquired the drugs unit of Belgian drugs, chemicals and plastics maker Solvay for $6.5 billion, it announced today. In addition to the purchase price of $6.5 billion, Illinois-based Abbott will also pay up to another $440 million in contingent payments between 2011 and 2013, depending on the performance of certain products.  The deal will add more than $3 billion to AbbottÔÇÖs annual sales, most of which will come from overseas.  Brussels, Belgium-based Solvay said in April that it could be interested in selling its drugs arm as R&D, production and legislation around new products becomes more expensive, time-consuming and complex. It is now expected to concentrate on its core chemicals and plastics businesses. At the same time, there has been a big push for consolidation within the drugs industry, with major players such as Pfizer and Merck & Co making big acquisitions this year despite the economic downturn.  "In anticipation of future market needs, we are ensuring we have the technologies, products, infrastructure and reach," AbbottÔÇÖs CEO Miles White said in a statement. Abbott will use the purchase of SolvayÔÇÖs business, its biggest since 2002, to expand into new markets such as Eastern Europe and Asia, where it has so far had limited presence. The deal also gives it full control of the TriCor cholesterol drug, lowering its dependence on the arthritis drug Humira, its biggest product, with $4.5 billion in annual sales. Swiss drug company Nycomed, which is owned by private equity firms, was also bidding for Solvay. Prior to AbbottÔÇÖs involvement, it was widely predicted to win the auction, with its bid of up to $6.5 billion. The Solvay deal is the latest in a series for Abbott. Earlier this year, Abbott purchased California-based eye care firms Advanced Medical Optics for $2.8 billion and Visiogen for $400 million. It also acquired the nutrition unit of Indian-based Wockhardt for $130 million and Californian cardiovascular technology firm Evalve for $410 million. Abbott employs more than 72,000 people and markets its products in 130 countries worldwide. * ┬á┬á┬á┬á┬á┬á┬á*┬á┬á┬á┬á┬á┬á┬á *