Speculation is rampant as to what GE will do next after passing on acquiring Abbott.
In July, the IVD industry was rocked by two bombshell developments that are likely to have significant long-term repercussions. In the long run, in fact, they may determine which major companies will emerge as leaders of the IVD industry—and the directions they will steer the industry.
The first major development occurred when Abbott (Abbott Park, IL) and General Electric Co. (GE; Fairfield, CT) decided to terminate their merger agreement (see Trends & Perspectives, page 14). When the Abbott-GE merger was announced last January, GE officials told IVD Technology that GE had always planned to enter the IVD market and acquiring Abbott was a fulfillment of that plan (see March 2007, page 13). But now that GE has decided not to buy Abbott, there has been a great deal of speculation about GE's next move, and especially whether it will try to purchase another IVD company.
One company that is no longer for sale is Dade Behring Inc. (Deerfield, IL), which Siemens Medical Solutions Diagnostics (Tarrytown, NY) acquired for $7 billion—the second of July's bombshell announcements (see Trends & Perspectives, page 14). Siemens appears to be making all of the right moves and decisions to become a comprehensive diagnostics company. Since last year, Siemens has spent more than $14 billion on three major IVD companies, and has solidified its position as one of the top players in the IVD marketplace.
GE also wants to make such a grand entry into the IVD industry by purchasing a major player that already has an extensive IVD product line. Manfred Scholz, president of Scholz Consulting Partners, believes that possible acquisition targets could include BD Diagnostics (Franklin Lakes, NJ), Ortho-Clinical Diagnostics (OCD; Raritan, NJ), or Roche Diagnostics (Indianapolis).
But Abbott officials said the merger with GE fell through partially because Abbott's diagnostic businesses are so closely integrated with its parent company that carving them out would have been difficult. Considering such difficulties that GE encountered in trying to acquire Abbott as part of a large conglomerate, GE may steer away from such companies as BD, OCD, and Roche that are also in similar positions.
Scholz also believes that other possible targets could be Beckman Coulter (Brea, CA) or bioMèrieux (Marcy l'Etoile, France). But whatever GE decides to do, past actions indicate that the company is committed to getting involved in the IVD market. In 2004, GE paid $9 billion to acquire Amersham Biosciences, which was GE's initial step as part of its grand plan to enter the IVD market and become a comprehensive diagnostics company. Taking this into consideration, GE does not want this vast investment to have been in vain, and will make a concerted effort to acquire another IVD company.