Johnson & Johnson has plunked down more than $4.32 billion to acquire Abbott Medical Optics, an Abbott Laboratories subsidiary, a news release said.
The deal is a win-win for both companies. It amplifies J&J’s vision care business and gives it access to the eye surgery market. The agreement also lets Abbott Laboratories devote more attention to its heart valve and diagnostics business. Abbott has been pre-occupied with digesting its St Jude acquisition announced in April, making the vision business less of a strategic fit.
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Abbott Medical Optics has a big profile in ophthalmic products and had sales of more than $1 billion in 2015, the news release noted. Its business segments include cataract surgery, laser refractive surgery and consumer eye health.
The outlook for eye procedures is pretty strong. About 20 million people are blind from age-related cataracts and increasing life spans plus population growth means those numbers will continue to rise, according to data from the World Health Organization, cited in the news release.
“…we will become a more broad-based leader in vision care,” said Ashley McEvoy, a J&J group chairman, who oversees the vision care businesses, in the news release. “Importantly, with this acquisition we will enter cataract surgery — one of the most commonly performed surgeries and the number one cause of preventable blindness.”
Medical device industry M&A activity has been hectic, due to increased price pressure from health systems, which are also consolidating, The Wall Street Journal noted.
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