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Abbott Laboratories has agreed to acquire cancer testing company Exact Sciences in a $21 billion deal.

Why it matters: The latest in a wave of health care M&A, this is the largest health care deal of the year.

By the numbers: Abbott, which makes medical devices, COVID-19 tests and other health products, will pay $105 per share for Madison, Wisconsin-based Exact Sciences, representing an enterprise value of $23 billion, including debt.

The price is a 51% premium to Exact Sciences' closing stock price Nov. 18, the last day of trading before reports of the deal surfaced.

Morgan Stanley and Wachtell, Lipton, Rosen & Katz advised Abbott. Centerview Partners, XMS Capital Partners and Skadden, Arps, Slate, Meagher & Flom advised Exact Sciences.

Catch up quick: Abbott's business has mostly stabilized since the COVID-19 pandemic, which significantly boosted its diagnostics segment.

In an effort to drive growth, CEO Robert Ford told investors in July the Chicago-area company was interested in acquiring diagnostic and device companies, per an earnings call transcript.

Zoom in: Exact Sciences is the maker of Cologuard, a colorectal cancer test that received FDA approval in 2014, and several other non-invasive cancer diagnostic tools.

Cologuard is widely reimbursed by insurers and supported by respected clinical data, which helps drive physician and patient adoption.

The company is on track to generate $3 billion revenue this year, which would help boost Abbott's total annual diagnostics sales to more than $12 billion, the companies said.

What they're saying: "Exact Sciences' innovation, its strong brand and customer-focused execution are unrivaled in the cancer diagnostics space, and its presence and strengths are complementary to our own," Ford said in a press release announcing the deal.

"This has been a deal that MedTech investors have long viewed as an attractive target for Abbott," JPMorgan analyst Robbie Marcus wrote in a note on Nov. 19 — the day reports of the Abbott and Exact deal first surfaced. We "see Abbott in particular as a company that has plenty of dry powder to deploy on deals given the strength of the company's balance sheet."

What's next: The transaction is expected to close in the second quarter of 2026.

Exact Sciences CEO Kevin Conroy will remain with the combined companies in an advisory role.

Editor's note: This story has been updated to note that this is the largest health care deal of the year.

Abbott Labs to acquire Exact Sciences in $21B deal

It's among the largest health care deals of the year.

Illustration of hundred dollar bills and coins arranged in the shape of a cancer ribbon.

Abbott Laboratories has agreed to acquire cancer testing company Exact Sciences in a $21 billion deal.Why it matters: The latest in a wave of health care M&amp;A, this is the largest health care deal of the year.

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Abbott Labs to acquire Exact Sciences in $21B deal

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