Abbott Labs Raises $20B in Notes for M&A
Abbott Laboratories has raised $20 billion in a new note issuance to fund its acquisition of Exact Sciences. The deal highlights the ability of large investment-grade strategic acquirers to tap unsecured bond markets at scale to finance major M&A transactions.
- The total enterprise value of the acquisition is estimated at $23 billion, with Abbott paying $105 per share in cash for Exact Sciences' equity, valued at approximately $21 billion. Abbott will also absorb about $1.8 billion of Exact Sciences' net debt. - The $20 billion debt financing is structured across eight series of notes with varying maturities, ranging from 2029 to 2066. This includes a mix of fixed-rate tranches with coupons between 3.7% and 5.6% and a $1 billion floating-rate tranche. - This acquisition marks a significant strategic move for Abbott, providing entry into the rapidly expanding $60 billion U.S. cancer screening and precision oncology diagnostics market. This is considered a new growth vertical for the company, which has historically focused on areas like diabetes, cardiovascular, and infectious diseases. - Exact Sciences is a leader in cancer diagnostics, best known for its non-invasive colorectal cancer screening test, Cologuard, and the Oncotype DX tests for breast cancer. The company is projected to generate over $3 billion in revenue for the current year. - Post-acquisition, Abbott's total diagnostics sales are expected to exceed $12 billion annually. Exact Sciences will operate as a subsidiary of Abbott and maintain its presence in Madison, Wisconsin. - The deal has been approved by the boards of both companies and by Exact Sciences' shareholders. The transaction is anticipated to close in the second quarter of 2026, pending regulatory approvals. - For Abbott, a company that has been described as historically reserved in its M&A activity, this represents the largest deal under CEO Robert Ford's tenure. It is also the largest acquisition announced in the medtech industry this year. - While a majority of shareholders approved the merger itself, a non-binding advisory proposal regarding the compensation for Exact Sciences' named executive officers in connection with the merger was not approved.
