Image: Abbott is seeking to terminate its proposed acquisition of Alere (Photo courtesy of iStock).
Abbott Laboratories (Abbott Park, IL, USA) has filed a complaint in the Delaware Court of Chancery seeking termination of its proposed acquisition of Alere (Waltham, MA, USA), citing material adverse events after both the companies had entered into a merger agreement on January 30, 2016.
Over a period of 10 months since the merger agreement, Alere has witnessed some developments that have negatively impacted its business. These developments include the elimination of the billing privileges of a substantial Alere division by the government, permanent recall of a key product platform, a number of new government subpoenas, a five-month delay in its 10K filing, and admission of internal control failures requiring a restatement of the company’s 2013-2015 financials. As per the terms of the merger agreement, Abbott is entitled to terminate the transaction in case adverse events materially change Alere's long-term prospects.
"Alere is no longer the company Abbott agreed to buy 10 months ago," said Scott Stoffel, divisional vice president of external communications, Abbott. "These numerous negative developments are unprecedented and are not isolated incidents brought on by chance. We have attempted to secure details and information to assess these issues for months, and Alere has blocked every attempt. This damage to Alere's business can only be the result of a systemic failure of internal controls, which combined with the lack of transparency, led us to filing this complaint."