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Abbott To Cut 3,000 Jobs Tied To Solvay Deal

Tue, 09/21/2010 - 9:00am
The Associated Press

NORTH CHICAGO, Ill. (AP) -- Abbott Laboratories said Tuesday it will eliminate 3,000 jobs and take almost $1.3 billion in charges over the next two years as it integrates its Solvay pharmaceuticals business.

The company said it expects $810 million to $970 million in restructuring costs and $310 million in integration costs. The charges include severance costs, write-down and depreciation costs, and expenses related to the end of some research and development programs and the transfer of other programs.

Abbott, which employs a total of almost 90,000 people, said it will cut jobs in manufacturing, commercial operations, research and development, and staff functions. Most of the jobs that will be eliminated are based in Europe, and almost all of them are part of Solvay's operations.

Abbott completed the $6.2 billion deal for the pharmaceuticals unit of Belgium-based Solvay in February. The deal gives Abbott access to markets including Eastern Europe, Latin America, and the Middle East, and Abbott said it would improve its sales by about $3 billion per year. It will also add about $500 million to its research and development costs.

Abbott has said the Solvay deal would add 10 cents per share to its profit in 2010, more than 20 cents per share by 2012, and larger amounts in subsequent years. Those estimates exclude one-time costs, so they are not affected by the charges.

Abbott expects to take $430 million of the charges in the current quarter and another $45 million to $210 million in the fourth quarter.

Shares of Abbott lost 21 cents to $52.05 in afternoon trading.

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