St. Jude Medical Inc., one of Minnesota's most prominent companies in the medical device industry, is being bought by an Illinois company in a deal worth billions of dollars.
Abbott Laboratories is acquiring the St. Paul-based St. Jude in a deal that was announced early Thursday – it's valued at $25 billion. Abbott will be taking on $5.7 billion in debt from St. Jude.
Here's a quick look at what both companies do, and why it matters in Minnesota.
What does St. Jude do?
St. Jude makes tiny medical devices that are generally used to treat heart and chronic pain issues, Forbes says.
They're based in St. Paul, and have about 18,000 employees around the world.
What does Abbott do?
Based in Abbott Park, Illinois, Abbott Laboratories has a wider scope, with similar-minded medical products like catheters, valves and stents. But they also have nutritional brands such as Pedialyte, a pharmaceutical drug wing, vision and diabetes care products, and more.
Medical device companies are a huge part of Minnesota
The medical device industry in Minnesota is huge – the state's Department of Employment and Economic Development calls it "an extraordinarily important pillar of Minnesota's economy." In total, those companies employ nearly 30,000 people in the state, and have billions of dollars in revenue.
What's next for the two companies?
Abbott and St. Jude say the acquisition basically makes them a stronger force in in the market, which has seen an increasing demand for cardiovascular medical devices.
Together, they'll have "one of the broadest portfolios of devices" out there, and also an "industry-leading pipeline" to getting products out there, according to a presentation.
They plan to hold the No. 1 or No. 2 positions "across large and high-growth cardiovascular device areas and will compete in nearly every area of the market," the presentation says.
"Today's announcement is an exciting next chapter for St. Jude Medical, bringing together two industry leaders with a shared passion for innovation, culture and patients," Michael T. Rousseau, St. Jude Medical president and CEO, said in the news release. "Our combined scale will expand the global reach, competitiveness and impact of our medical device innovation for physicians and hospitals."
The transactions has been approved by both companies' boards, but needs to be OKed by shareholders too. It's expecetd to close in the fourth quarter of 2016.