Abbott Laboratories Launches Landmark $20 Billion Bond Offering

Abbott Laboratories raises $20 billion in an eight-tranche bond offering to finance its strategic takeover of cancer screening firm Exact Sciences, with strong investor demand.

In a move to fund one of its most significant strategic acquisitions, Abbott Laboratories has successfully priced a massive $20 billion bond issue. The debt offering, among the largest of the year, is earmarked to finance the planned takeover of cancer screening specialist Exact Sciences. Market reception has been robust, with final terms coming in more favorably for the healthcare giant than initially anticipated, though specific provisions highlight investor demands for protection.

Strong Financial Backdrop Supports Deal

Abbott approaches this major acquisition from a position of financial strength. The company's full-year 2025 results showed revenue growth of 5.7%, reaching $44.3 billion. This performance was largely driven by its medical devices segment, which saw a 12.6% sales increase to $21.4 billion. This growth effectively offset an expected 4.3% decline in the diagnostics business, a dip primarily attributed to lower global demand for COVID-19 tests.

Shareholders of Exact Sciences gave their approval for the acquisition on February 20. The transaction is anticipated to close before the end of the second quarter of 2026. Through this deal, Abbott aims to significantly strengthen its footprint in the rapidly evolving field of early cancer detection.

Eight-Tranche Offering Attracts Strong Demand

The bond issuance is structured across eight separate tranches with maturities ranging from three to forty years. Notably, the longest-dated portion, the 40-year bond, is expected to carry an interest rate premium of 0.9 percentage points above comparable U.S. Treasury securities. This represents a tightening from earlier discussions, which had floated a spread of approximately 1.15 percentage points, reflecting substantial investor appetite for the offering.

A key protective clause has been included for bondholders. Should the acquisition of Exact Sciences fail to be completed by five business days after February 17, 2027, the bonds will be subject to a special redemption at 101% of their principal value, plus any accrued interest. This "special mandatory redemption" feature provides lenders with a clear safeguard and repayment timeline in the event the deal does not proceed.

The successful placement of this substantial debt package underscores Abbott's creditworthiness and the strategic market logic behind its expansion into oncology diagnostics.