Abbott and St Jude, which is based in St Paul, Minnesota, already have a strong alliance in the field of cardiovascular devices, and sell their portfolio of products jointly to hospitals. A full merger would potentially give the enlarged company greater leverage in negotiating with all healthcare providers.
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Abbott is believed to have considered moving on St Jude earlier in the year, but was waiting for clarity on the future of Mylan, the generic drug specialist in which Abbott has a 15 per cent stake. Abbott’s holding dates from a deal 12 months ago, when Abbott sold Mylan its developed market generic drugs business for $5.3bn in stock.
This would be a major step in the reshaping of Abbott that began with the AbbVie spinoff.
Disclosure: Author has no position in any stock mentioned