LONDON, UK / ACCESSWIRE / September 19, 2016 / Active Wall St. blog coverage looks at the headline from the leader in health-care products, Johnson & Johnson (NYSE: JNJ) ("J&J"), as the company announced on September 16th, 2016, an agreement to acquire Abbott Medical Optics (AMO), a sub-division of the Abbott Laboratories (NYSE: ABT), for $4.325 billion in cash. This acquisition will expand the current portfolio of J&J Vision Care Inc., whilst including ophthalmic products across three business segments, namely, cataract surgery, laser refractive surgery, and consumer eye health. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

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The deal is expected to be finalized by the first quarter of 2017, as mentioned in the official press release. Abbott Medical Optics, a subsidiary unit of Abbott Laboratories is tasked with the development of equipments used in surgeries to repair cataracts, advanced laser vision (LASIK) technologies, and multipurpose solutions including hydrogen peroxide cleaning systems for patients who use contact lenses. AMO generated revenue of $1.1 billion for the year 2015.

The portfolio expansion

J&J aims at expanding its portfolio and mark its presence across the vision care segment. Medical optics is the third major venture of J&J after drug development and generics. With this acquisition, J&J gets to expand its diversified portfolio and enable it to mark its presence and establish itself as the leader of the vision care sector.

Given that "eye health is one of the largest, fastest growing, and most underserved segments in healthcare today," the acquisition will help J&J "become a more broad-based leader in vision care," Ashley McEvoy, company group chairman, mentioned in a recent statement.

Abbott singularized its ventures

Abbott Laboratories is in the process of acquiring a stake in St. Jude Medical Inc. (NYSE: STJ) for $25 billion, and has drawn an agreement with Alere Inc. (NYSE: ALR), to buy the firm for $5.8 billion. The agreement with Alere Inc., announced in February, 2016 has still not been finalized owing to several issues.
Alere is the leading maker of medical tests which are conducted with respect to heart ailments. St. Jude on the other hand, is the leading developer of devices used for treatment of heart failure. With these two acquisitions, Abbott seemingly aims to limit its ventures to cardiovascular devices and solutions, and in the long term acquire the position of the world leader in the sector.

This merger with J&J is set to ease the financial burden on Abbott Laboratories. Abbott Laboratories had acquired Advanced Medical Optics for $2.8 billion, in the year 2009. The medical optics sector is set to view an upturn owing to the power-shift between two strong market counterparts.

Stock Performance

On Friday, September 16, 2016, Johnson & Johnson's share price finished the trading session at $118.25, sliding marginally 0.32%. A total volume of 12.38 million shares exchanged hands, which was higher than the 3 months average volume of 6.67 million shares. The stock has advanced 3.08% and 11.52% in the last three months and past six months, respectively. Furthermore, since the start of the year, shares of the company has surged 17.56%. The stock is trading at a PE ratio of 22.03 and has a dividend yield of 2.71%.

Abbott Laboratories' stock is trading up by 1.82%, closing last Friday's session at $41.87 on volume of 15.79 million shares, which was higher than the 3 months average volume of 10.07 million shares. The company's shares gained 12.67% in the last three months. The company's shares are trading a PE ratio of 32.13 and have a dividend yield of 2.48%.

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SOURCE: Active Wall Street