Abbott seeks to terminate $5.8bn merger deal with Alere

Abbott Laboratories has moved to terminate its $5.8 billion acquisition of Alere.

The termination of the January deal was set in motion as Abbott announced on Wednesday, December 7, that it has filed a complaint in the Delaware Court of Chancery.

Abbott’s decision comes from Alere’s alleged failure to file financial statements because of revenue recognition problems in foreign countries.

Scott Stoffel, divisional vice president of external communications at Abbott, said in a statement: “Alere is no longer the company Abbott agreed to buy ten months ago.”

Stoffel added: “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.”

In a recent statement, Abbott claims that the damage to Alere’s business could only be the result of a “systemic failure of internal controls”.

Alere said in a statement: “Abbott’s lawsuit is entirely without merit. As Abbott well knows, none of the issues it has raised provides it with any grounds to avoid closing the merger.”

The company added: “Alere has fully complied with its contractual obligations under the merger agreement and is highly confident that the merger will be completed in accordance with the terms set forth in the merger agreement.

“Alere will take all actions necessary to protect its shareholders and to compel Abbott to complete the transaction in accordance with its terms.”

Under the terms of the merger agreement, Abbott may terminate the transaction if unfavourable events change Alere’s long-term prospects.