Abbott Laboratories (ABT
) said Friday it would sell its eye care business to Johnson & Johnson (JNJ
) for $4.33 billion in cash and stock as part of an effort to focus its business on cardiovascular devices and diagnostics.
The unit, Abbott Medical Optics, which the Chicago-based company acquired in 2009 for $2.8 billion, had revenue of $1.1 billion in 2015.
The deal comes as Abbott Labs is in the process of acquiring cardiovascular device maker St. Jude Medical and medical testing company Alere in an effort to refocus the company and give it “leadership positions in cardiovascular devices and expanding diagnostics,” according to Chief Executive Miles White.
Abbott Medical Optics makes equipment to repair cataracts and for Lasik procedures to improve vision. J&J said that by combining the unit with its Acuvue contact lens business, it can become a more broad-based leader in vision care. JNJ’s vision business generated revenue of $685 million in the second quarter.
Abbott shares rose 1.87% to $41.87 on Friday following news of the deal on speculation that the cash coming from the sale would allow the company to complete its acquisitions without issuing new stock. JNJ shares eased 0.32% to $118.25.
have issued ratings on JNJ in the past 30 days, 87% positive with a medium price target of $136.50, which marks a 15% upside to the current stock price. Four analysts
have issue ratings on ABT in the past 90 days, 100% positive with a price target of $50, or a 19% upside to the current price.