Alere Inc. Sued Abbott Laboratories To Compel The Completion Of Their Pending $5.8 Billion Takeover Deal

Economy Jamie Simon
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In a bid to compel the completion of their outstanding $5.8 billion takeover deal, Alere Inc. is filing a lawsuit against Abbott Laboratories. On Friday, Alere said the medical-equipment makers failed to obtain regulatory requirements, as well as antitrust approvals which it claims has created a breach on the parties’ merger agreement.

In a filing in Delaware Chancery Court, Alere Inc. accused Abbot, for willfully refusing to secure U.S. antitrust clearance in order to foil the controversial transaction. While claiming to be fully in line with its obligations, Abbott denied the allegations but said it is working hard to close the purchase with all necessary regulatory approvals.

This is not the first time such an allegation between the health-care companies has been observed but the saga – which has been existing for several months now – only seemed to have taken a new turn. From all indications, this could probably be a drawn out dispute having made it to the court system.

After the suit was recently disclosed, Alere stock fell further even after trading well under the $56-a-share offer for several months. While Abbott experienced little changes at $42.98, Alere stock closed at $39.55 after losing 2.8 percent in New York.

Few weeks after the signing of the takeover agreement, both parties began to fall apart when Alere failed to promptly file the document about its financial performance in 2015 alongside with securities regulators.

As part of efforts to cover legal costs in exchange for ripping up the contract and getting out of the deal, Abbott CEO Miles White offered about $50 million to Alere, however, this was never resolved as Alere’s board came up to reject the proposal.

Should Abbot fail to complete the purchase, there will be no provision for breakup for Alere as the suit is projected to force the closing of the merger agreement.