By Chelsey Dulaney
Zoetis Inc. has agreed to buy the animal health business of
Abbott Laboratories for $255 million, less than a week after it
surfaced that activist investor William Ackman has taken a roughly
$2 billion stake in the company.
Abbott Animal Health's products include anesthesia, fluid
therapy, pain, oncology and diabetes monitoring. The acquisition
will expand Zoetis' diagnostics business as more pets are being
treated for pain and serious illnesses, such as cancer and
diabetes.
Zoetis, which was spun off Pfizer Inc. last year, makes vaccines
and medicines for livestock and household pets. With $4.6 billion
in sales in 2013, Zoetis is the largest company in the
animal-health industry.
"The addition of Abbott Animal Health assets is an excellent
complement to the Zoetis companion animal business and addresses
the challenges our customers face today in effectively raising and
caring for animals that are living longer and receiving more
intensive medical and surgical treatment," said Zoetis Chief
Executive Juan Ramón Alaix in a news release.
The deal is expected to close in the first quarter of next
year.
The Wall Street Journal reported last week that Mr. Ackman's
Pershing Square Capital Management LP has built a roughly 10% stake
in Zoetis with fellow hedge fund Sachem Head Capital Management LP.
Ackman could push Zoetis to sell itself to a large drug maker such
as Valeant Pharmaceuticals International Inc., people familiar with
the matter have said.
The animal-health industry has been an active part of the recent
mergers-and-acquisitions boom. In April, Novartis AG agreed to sell
its animal-health unit to Eli Lilly & Co. for $5.4 billion. The
deal is expected to boost Lilly's position in the industry to No. 2
behind Zoetis.
Write to Chelsey Dulaney at chelsey.dulaney@wsj.com
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