Abbott Laboratories (ABT): This Company & Ache Labs: A Perfect Match?

Still, buying Ache isn’t a perfect match. Abbott would have to sell off any branded pharmaceutical lines, as keeping them around after its branded drug spinoff doesn’t make any sense. That point alone makes pharmaceutical-friendly acquisition competitors Novartis AG (ADR) (NYSE:NVS) and Pfizer Inc. (NYSE:PFE) well-suited to picking up Ache. Furthermore, Brazil’s growth has slowed down recently: The country reported only 0.9% GDP growth in 2012, a far cry from levels earlier this century. While the Brazilian government still predicts optimistic growth of around 4.5% this year, the nation will have to keep moving forward if Abbott’s counting on growing its sales here.

While Ache would be a pricey buy, it’s nonetheless an acquisition worth pulling the trigger on for Abbott. Cementing a foothold in emerging markets is key for this company’s future, and there are few attractive countries with an established, growing middle class like Brazil. Only time will tell whether Abbott can beat out its competitors for this buy, and investors should be wary of the company overpaying for Ache; however, at the right price, Abbott would find this pickup to be just what the doctor ordered.

The article Abbott and Ache Labs: A Perfect Match? originally appeared on Fool.com and is written by Dan Carroll.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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