Abbott Seeks To Terminate Alere Acquisition: 'Not The Company We Agreed To Buy'

Abbott Laboratories ABT has filed a complaint seeking to terminate its $5.8 billion proposed acquisition of Alere Inc ALR. The company cited the "substantial loss" in Alere’s value since the signing of the agreement on January 30, 2016.

Abbott cited a number of "damaging business developments" for Alere over the past few quarters:

• Government’s elimination of billing privileges for a “substantial Alere division.”
• Permanent recall of “an important product platform.”
• New government subpoenas, two being criminal.
• Five-month delay in 10k filing with admission of internal control failures retroactive impacting of 2013-2015 financial statements.

"Alere is no longer the company Abbott agreed to buy 10 months ago," said Abbott representative Scott Stoffel. "These numerous negative developments are unprecedented and are not isolated incidents brought on by chance."

The Abbott representative cited a “systematic failure of internal controls” and “lack of transparency” as the key catalysts leading into the complaint filing Wednesday.

Shares of both stock were trading lower Wednesday morning.

Alere responded that the claims were "entirely without merit" later in the day:

"Abbott's lawsuit is entirely without merit. As Abbott well knows, none of the issues it has raised provides it with any grounds to avoid closing the merger. Alere has fully complied with its contractual obligations under the merger agreement and is highly confident that the merger will be completed in accordance with the terms set forth in the merger agreement. Alere will take all actions necessary to protect its shareholders and to compel Abbott to complete the transaction in accordance with its terms."