DOW JONES NEWSWIRES

Abbott Laboratories (ABT) has agreed to acquire Advanced Medical Optics Inc. (EYE) for $1.36 billion, allowing the medical-device maker to get into the eye-health business at a discount.

Shares of Advanced Medical crumbled nearly 90% in September and October as providers of laser-vision correction services were pummeled during the stock market's crash, since economic woes crimp demand for such products. But Advanced Medical also provides cataract services and contact-lens products.

Abbott is agreeing to pay $22 a share for Advanced Medical, more than double Friday's closing price of $8.85, but at the level the stock was trading just four months ago. The stock briefly cracked $50 in mid-2006.

Including debt, the deal is valued at $2.8 billion.

"Abbott will immediately become a global leader in vision," said Abbott Vice President John M. Capek. "The business is poised for long-term growth, driven by advances in refractive surgery technologies, including Lasik, and an aging global population."

Abbott noted Advanced Medical is the world's biggest firm in Lasik surgical devices, No. 2 in the cataract surgical-device market and No. 3 in contact-lens care products. It went on to highlight the need to serve the market for cataracts, which 60% of people over 60 have. Those with cataracts are expected to grow nearly 50% in the next decade, said Abbott.

Abbott Chairman and Chief Executive Miles D. White said his company's global heft "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."

Meanwhile, Abbott reiterated its 2008 earnings target and said the deal won't have an affect on 2009 profit but will boost next year's bottom line. Abbott on Monday projected 2009 earnings, excluding items, of $3.65 to $3.70 a share, within analysts' expectations.

Abbott shares were down 1.2% premarket at $50.56.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com

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