Be careful what you wish for.
That seems to be the lesson out of the mess that Abbott finds itself in regarding its $5.8 billion proposed purchase of point-of-care giant Alere.
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While 10 months ago Abbott Laboratories CEO Miles White sang the praises of the company, on Wednesday the Abbott Park, Illinois company announced that it has filed a lawsuit in the Delaware Court of Chancery to force the break between the two.
In the news release, Abbott cites a litany of reasons for its change of mind.
- government eliminating the billing privileges of a substantial Alere division
- the permanent recall of an important product platform,
- multiple new government subpoenas, including two new criminal subpoenas, and a
- five-month delay in filing its annual report (10K) coupled with admissions of internal control failures requiring restatement of its 2013-2015 financials.
“Alere is no longer the company Abbott agreed to buy 10 months ago,” said Scott Stoffel, divisional vice president of external communications of Abbott, in the news release. “These numerous negative developments are unprecedented and are not isolated incidents brought on by chance. We have attempted to secure details and information to assess these issues for months, and Alere has blocked every attempt. This damage to Alere’s business can only be the result of a systemic failure of internal controls, which combined with the lack of transparency, led us to filing this complaint.”
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News that Abbott wanted to wash its hands off of this deal arose in April, when Alere revealed that Abbott wanted to pay a termination fee of $25-to-$30 million. However, Alere’s board blocked that effort.
That same day – April 28 – Abbott announced it was buying St. Jude Medical for $25 billion..
Back in February
