Abbott and AMO reach acquisition agreement

January 12, 2009

Abbott and Advanced Medical Optics (AMO) announced in a joint prepared statement that an agreement has been reached for Abbott to acquire AMO for $22 per share in cash, for a total transaction value of approximately $2.8 billion, inclusive of estimated net debt at the time of closing, approved by both boards of directors.

Abbott Park, IL and Santa Ana, CA

-Abbott and Advanced Medical Optics (AMO) announced in a joint prepared statement that an agreement has been reached for Abbott to acquire AMO for $22 per share in cash, for a total transaction value of approximately $2.8 billion, inclusive of estimated net debt at the time of closing, approved by both boards of directors.

Under the terms of the agreement, Abbott will commence a tender offer by Jan. 26 to purchase all outstanding shares of AMO. The tender offer is conditioned on the tender of a majority of the outstanding shares of AMO’s common stock on a fully diluted basis. The $2.8 billion estimated value of the transaction is based on AMO’s approximately 62 million fully diluted shares outstanding, plus estimated net debt at the time of closing.

Santa Ana, CA-based AMO comprises three segments: cataract surgery, laser vision correction, and eye-care products. AMO’s holds global statuses as the number one position in LASIK surgical devices, the number two position in the cataract surgical device market, and the number three position in contact lens care products.

"Through superior vision-care technologies and service, AMO has established itself as a leader in this multi-billion dollar medical device segment. With AMO, Abbott is enhancing and strengthening its diverse mix of medical device businesses and gaining a leadership position in another large and growing segment," said Miles D. White, chairman and chief executive officer, Abbott. "Additionally, Abbott’s significant global presence will help drive growth opportunities for this business, especially in international markets, where favorable demographics are driving demand for advanced eye-care procedures and products."

"This transaction underscores the fundamental value of the AMO franchise, the talent and expertise of our global team, and the strength of our product offering, pipeline, and strategy to provide refractive vision care for people of all ages," said Jim Mazzo, chairman and chief executive officer, AMO, who will remain with Abbott as president, AMO. "Joining forces with Abbott will fortify our position as a global ophthalmic medical device leader and enhance our ability to serve eye-care practitioners and patients around the world."

Abbott said it expects the transaction to be neutral to ongoing earnings per share in 2009 and accretive beginning in 2010, both before one-time transaction-related costs, which will be provided at a later date.