Abbott Laboratories said it would buy Alere for $5.8 billion in a deal that would expand its diagnostics business and make it a leader in point-of-care testing.
Point-of-care tests help increase the speed of treatment by bringing test results to doctors in a matter of minutes as they can be conducted in the physician's office, an ambulance or even at home.
Alere, which has annual sales of $2.5 billion, makes tests for infections such as HIV, tuberculosis, malaria and dengue.
Abbott will pay $56 per share in cash, a premium of about 51% to Alere's Friday closing.
Abbott, which had annual sales of $20.4 billion in 2015, said its total diagnostics sales would exceed $7 billion after the close of the deal.
Abbott, which makes products ranging from Similac infant formula to Ensure beverages for adults, reported lower than expected quarterly revenue for the first time in four quarters last week, due to a strong dollar.
The deal will immediately add to Abbott's earnings per share upon close and contribute significantly thereafter, the companies said.
Alere's net debt, currently $2.6 billion, will be assumed or refinanced by Abbott.
