It has been said that the acquisitions and mergers are done to achieve the dominance of the industry in competition, but now both the terminologies have been defined in a very opposite way. Acquisition and merging strategies play a vital role in every type of the industry; it fosters the efficiency of the company and helps to expand its products and services to a wide range.
But at the same time, as it is very well said “every coin has two side”, acquisitions can also come up with load of damage to hit your business as well as reputation.
Abbott filed a case in Delaware Court of Chancery in quest to cancel the $5.8 Billion acquisition of Alere due to significant loss in the value.
Abbott stated that “the company has gone through a sequential damage in terms of business development, since the agreement was signed to take over Alere”.
The loss is a result of numerous factors such as permanent recall of products, abolition of billing benefits provided by the government respective to Alere’s division, numerous criminal as well as legal government orders to the company, huge delay in providing the company’s details related to financial status—Abbott further added.
Scott Stoffel, Abbott’s VP of external communications, said “Alere is not the same company which Abbott decided to buy 10 months ago. We have also tried to secure data and information to evaluate these matters for many months, but Alere made every effort to obstruct the attempt”.
“However, the reasons that motivated us to file the complaint were due to failure of internal authorities and lack intelligibility”, he further declared.
Hence post filling of the suit by Abbott, Alere reacted by stating that the filing is entirely devoid of merit.
Thus to overcome the hotchpotch created by Alere, Abbott is now planning, and is eager, to acquire St Jude Medical for $25 Billion probably by the end of 2016.