updated 1/19/2007 10:25:27 AM ET 2007-01-19T15:25:27

General Electric Co. will acquire part of Abbott Laboratory’s diagnostics business for $8.13 billion in cash, the two companies announced Thursday.

The addition of Abbott’s primary in vitro diagnostics and point-of-care diagnostics businesses will broaden GE’s $16 billion health care business, which has moved into health care information technology and molecular diagnostics in the past few years. (MSNBC.com is a joint venture of Microsoft and GE's NBC Universal unit.)

The sale, which does not include Abbott’s molecular diagnostics and diabetes care businesses, is expected to close in the first half of 2007.

The acquisition is “consistent with GE’s strategy to invest in high-technology global infrastructure businesses that deliver strong top-line growth, earnings expansion and expanded margins,” Jeffrey Immelt, GE chairman and chief executive, said in a statement.

Abbott Chairman and CEO Miles D. White said that market changes over the last decade helped trigger the deal.

“Innovation in this segment will be increasingly driven by automation, system integration and a host of skills that GE can offer,” White said in a statement.

Shares of North Chicago, Ill.-based Abbott Laboratories closed at a nearly five-year high Thursday amid reports the company was close to selling its diagnostic division to Fairfield, Conn.-based General Electric. The deal was announced after the markets closed.

Abbott stock rose $1.24, or 2.4 percent, to $52.79 on the New York Stock Exchange — its highest closing price since March 4, 2002. GE shares rose 2 cents to close at $38 on the NYSE, near the upper end of its 52-week range of $32.06 to $38.49.

Abbott’s in vitro diagnostic division tests blood and urine samples to diagnose diseases and other conditions. GE’s primary health care business is manufacturing diagnostic equipment, including ultrasound and X-ray machines and screening equipment. The company entered the molecular diagnostic market when it paid more than $9 billion in 2004 for Britain’s Amersham, a bioscience and medical diagnostic firm.

GE is developing molecular agents that target specific diseases when they are injected into the blood stream. The agents show up during screenings indicating that a patient has a particular cancer or disease.

Diagnostics related to breast cancer has been a key focus of GE.

In the last several months, GE has been selling off slower-growth businesses such as insurance and plastics and focusing on faster-growth areas such as energy, oil and gas equipment, rail engines, health care technology, finance and water processing technology.

Within the past year, Abbott acquired Guidant’s vascular wing for $4.1 billion and Kos Pharmaceuticals for $3.7 billion. It spun off low-growth hospital products unit Hospira in 2004.

In the same year, it increased the glucose-monitoring side of the diagnostics business with a $1.2 billion deal for TheraSense.

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