Dive Brief:
- Alere Inc., provider of rapid diagnostic tests, is attempting to force Abbott Laboratories to follow through on a February acquisition agreement that has since gone sour.
- Abbott had agreed to purchase Alere for almost $5 billion but got cold feet just a few months later and offered Alere $50 million to forget about it--which Alere wasn't willing to do.
- Alere announced Friday it had filed a complaint in Delaware's Chancery Court to compel Abbott to make good on the terms of the agreement and go through with promptly obtaining the necessary anti-trust approvals.
Dive Insight:
The situation provides an example of the risks inherent in becoming a reluctant buyer with potentially little recourse. Since the acquisition deal was signed, it has become apparent Alere has a host of issues that could soon belong to Abbott.
The company disclosed it has been subpoenaed in a foreign corruption investigation regarding payments in Africa, Asia and Latin America; it is separately involved in a federal probe of its government-billing practices; and the company was also late in filing its 2015 annual report, The Wall Street Journal reported.
The July news of the Medicare and Medicaid billing probe caused Alere's stock to tumble a startling 29% to $31.47 and stock shares on Friday closed at $40.69, significantly beneath the deal price of $56.
Abbott's position earlier this month was that the deal might not go through “on a timely basis, or at all," the Journal reported, though it appears Alere's move may have made an impact; as of Friday Abbott stated it is in compliance with its obligations under the deal and that it continues to work toward the regulatory approvals.