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Siemens to Buy L.A. Lab Firm

April 28, 2006|Daniel Yi | Times Staff Writer

German industrial conglomerate Siemens announced plans Thursday to buy Los Angeles-based medical lab company Diagnostic Products Corp. for $1.86 billion in cash.

Under the deal, which must be approved by regulators and Diagnostic Products shareholders, Siemens will pay $58.50 for each outstanding share of Diagnostic. The offer is 21% above Wednesday's closing price.

Diagnostic Products shares rose $9.36, or 19%, to $57.81 on the news Thursday. Siemens fell $1.45, or 1%, to $97.31.

Munich-based Siemens, with sales of $91 billion last year, is better known as a maker of telephone and information technology products, but its business lines include healthcare products through its Siemens Medical Solutions unit, based in Malvern, Pa., and Erlangen, Germany.

"The potential is huge to drive groundbreaking innovations by combining" the technologies of both companies, said Erich R. Reinhardt, chief executive of Siemens Medical Solutions.

The acquisition would give Siemens access to technology it doesn't have, Reinhardt said. Siemens Medical Solutions specializes in medical imaging and healthcare-related information technology.

Diagnostic Products makes equipment that tests body fluids for cancer, cardiac disease, allergies and other conditions. The company, founded in 1971, had sales of $481 million last year and operating income of $96 million. It has offices in more than 100 countries.

"This merger will allow us to continue on our current rapid course of development while also providing DPC access to the resources and support of a recognized leader in the delivery of integrated healthcare solutions," said Diagnostic Products CEO Michael Ziering.

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