Abbott Expands Its Growing Medical Device Business with Acquisition of Advanced Medical Optics (AMO)


Adding an established global leader in ophthalmic care will provide long-term sustainable growth platform with more than $1 billion in annual sales

Acquisition gives Abbott a leadership position in another large and growing medical device segment

Abbott expects this transaction to be neutral to ongoing earnings per share in 2009 and accretive beginning in 2010

ABBOTT PARK, Ill. and SANTA ANA, Calif., Jan. 12-- Abbott (NYSE:ABT) and Advanced Medical Optics (AMO) (NYSE:EYE) announced today a definitive agreement for Abbott to acquire AMO for $22 per share in cash, for a total transaction value of approximately $2.8 billion, inclusive of estimated net debt at the time of closing. Based in Santa Ana, Calif., AMO is a global leader in ophthalmic care, comprised of three segments: cataract surgery, laser vision correction (LASIK), and eye care products. Globally, AMO holds the number one position in LASIK surgical devices, the number two position in the cataract surgical device market and the number three position in contact lens care products.

"Through superior vision care technologies and service, AMO has established itself as a leader in this multi-billion dollar medical device segment. With AMO, Abbott is enhancing and strengthening its diverse mix of medical device businesses and gaining a leadership position in another large and growing segment," said Miles D. White, chairman and chief executive officer, Abbott. "Additionally, Abbott's significant global presence will help drive growth opportunities for this business, especially in international markets, where favorable demographics are driving demand for advanced eye care procedures and products."

"This transaction underscores the fundamental value of the AMO franchise, the talent and expertise of our global team, and the strength of our product offering, pipeline and strategy to provide refractive vision care for people of all ages," said Jim Mazzo, chairman and chief executive officer, AMO, who will be remaining with Abbott as president, AMO. "Joining forces with Abbott will fortify our position as a global ophthalmic medical device leader and enhance our ability to serve eye care practitioners and patients around the world."

Global Growth in Vision Correction

Population growth and demographic shifts are increasing demand for advanced vision care technologies across all geographies and age groups. For example, about 60 percent of people older than 60 have cataracts, which are the leading cause of vision loss among this age group. It is estimated that 700 million people globally are 60 years or older, and that number is expected to grow to one billion over the next decade.

"With AMO, Abbott will immediately become a global leader in vision," said John M. Capek, executive vice president, Medical Devices, Abbott. "The business is poised for long-term growth, driven by advances in refractive surgery technologies, including LASIK, and an aging global population."

Financial Terms

Under the terms of the agreement, Abbott will commence a tender offer by Jan. 26, 2009, to purchase all outstanding shares of AMO at $22 per share. The tender offer is conditioned on the tender of a majority of the outstanding shares of AMO's common stock on a fully diluted basis. The $2.8 billion estimated value of the transaction is based on AMO's approximately 62 million fully diluted shares outstanding, plus estimated net debt at the time of closing. The Boards of Directors of AMO and Abbott have approved the transaction. Abbott expects the transaction to be neutral to ongoing earnings per share in 2009, and accretive beginning in 2010, both before one-time transaction-related costs, which will be provided at a later date.

The transaction is subject to customary closing conditions, including antitrust clearances. Abbott and AMO expect the transaction to close in the first quarter of 2009.

Abbott Conference Call

Abbott will conduct a special conference call today at 8 a.m. Central time(9 a.m. Eastern time) to provide an overview of the transaction. The live Webcast will be accessible through Abbott's Investor Relations Web site at www.abbottinvestor.com/.

About Advanced Medical Optics (AMO)

AMO is focused on providing the full range of advanced refractive technologies and support to help eye care professionals deliver optimal vision and lifestyle experiences to patients of all ages. The company has operations in 27 countries and markets products in approximately 60 countries. For more information, visit the company's Web site at http://www.amo-inc.com/.

About Abbott

Abbott is a global, broad-based health care company devoted to the discovery, development, manufacture and marketing of pharmaceuticals and medical products, including nutritionals, devices and diagnostics. The company employs more than 68,000 people and markets its products in more than 130 countries.

Abbott's news releases and other information are available on the company's Web site at http://www.abbott.com/.

About Advanced Medical Optics

Advanced Medical Optics is a global leader in ophthalmic care, comprised of three segments: cataract surgery/intraocular lens (IOL), laser vision correction and eye care products.

o Headquarters: Santa Ana, Calif.

o Stock Symbol: NYSE: EYE

o Founded: 2002 (spin-off from Allergan)

o 2007 Sales: $1.09 billion

o Employees: 3,700

Primary Businesses

o Cataract Surgery/IOL: Devices for cataract surgery, which replaces a patient's aging and cloudy natural lens with an IOL or artificial lens to restore vision.

o Laser Vision Correction (LASIK): Devices used for refractive laser eye surgery to correct myopia (nearsightedness), hyper-opia (farsightedness) and astigmatism (condition that causes blurred vision).

o Eye Care: Contact lens care products including multi-purpose cleaning and disinfecting solutions, daily cleaners and contact lens rewetting drops; and over-the-counter dry eye products.

Products

o Cataract Surgery/IOL: WhiteStar Signature(TM) Phacoemulsification System, Healon(R) Viscoelastics, Tecnis(R) Aspheric IOL, Tecnis(R) Multifocal IOL, ReZoom(R) Multifocal IOL, Verisyse(R) Phakic IOL.

o Laser Vision Correction (LASIK): iLASIK((TM)), VISX((TM)) Excimer Technology, IntraLase((TM)) FS Technology, Advanced CustomVue((TM)) Procedure.

o Eye Care: COMPLETE® Multi-Purpose Solution, Blink Contacts((TM)) Lubricant Eye Drops, Oxysept® UltraCare Formula, Blink® Tears Lubricating Eye Drops

Vision Facts

o About 60 percent of people 60+ years old have cataracts.

o The global population is aging at unprecedented levels. There are more than 700 million people globally older than 60 (up from 600 million in 2000); by 2020, this number is projected to increase to 1 billion.

o Cataracts are the leading cause of vision loss among people 55 and older.

o More than 15 million cataract procedures are performed worldwide annually.

o Approximately 52 percent of people have some form of myopia or hyperopia.

o More than 3.5 million LASIK procedures are performed globally annually; LASIK accounts for more than 90 percent of all U.S. refractive surgical procedures.

CONTACT:
Abbott Media,
Melissa Brotz,
+1-847-935-3456,
or Scott Stoffel,
+1-847-936-9502,

or Abbott Investors,
John Thomas,
+1-847-938-2655,
Tina Ventura,
+1-847-935-9390,
all of Abbott;

or AMO Media,
Steve Chesterman,
+1-714-247-8711,

or AMO Investors,
Sheree Aronson,
+1-714-247-8290,
both of Advanced Medical Optics

Web site: http://www.abbott.com/

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