Abbott Laboratories (NYSE:ABT) and BASF Pharma (NYSE:BF) said Friday that they have entered a definitive agreement for Abbott to acquire the pharmaceutical business of BASF, which includes the global operations of Knoll Pharmaceuticals Co. Inc., of Mount Olive, N.J.

The deal enhances Abbott's global pharmaceutical business and enables the company to broaden its global infrastructure, acquire late-stage and marketed products, increase its pharmaceutical research and development spending significantly and access leading monoclonal antibody technologies.

Abbott Park, Ill.-based Abbott will pay $6.9 billion in cash (EURO7.8 billion) for the pharmaceutical business of BASF, which includes Knoll. Subject to approval by regulatory agencies and customary closing conditions, the transaction is expected to be completed in the first quarter of 2001.

Excluding the impact of one-time charges, on a diluted earnings per share basis Abbott expects the acquisition will result in a 12-cent dilution in 2001, and be accretive thereafter. The acquisition will be financed through a combination of internal cash resources and external borrowings.

Abbott's stock closed Friday at $46.812, down $1.312, and BASF's stock closed at $41.187, up 12.5 cents.

- Kim Coghill