QUEST DIAGNOSTICS TO COMPLETE ACQUISITION OF SMITHKLINE
BEECHAM CLINICAL LABORATORIES
TETERBORO, N.J., AUGUST 9, 1999 Quest Diagnostics Incorporated
(NYSE: DGX) announced today that all agreements required to complete the
previously announced acquisition of SmithKline Beecham's clinical laboratory
operations have been finalized by Quest Diagnostics and SmithKline Beecham
plc (NYSE: SBH). The transaction is expected to close within two weeks.
Quest Diagnostics is acquiring SmithKline Beecham Clinical Laboratories
(SBCL) for approximately $1.3 billion in cash and stock, and will become
the nation's leading provider of diagnostic testing, information and services.
"Now that all contracts have been finalized, we are planning an orderly
closing," said Kenneth W. Freeman, Chairman and Chief Executive Officer
of Quest Diagnostics.
Under the main acquisition agreement, which was approved by Quest Diagnostics
shareholders on June 29, Quest Diagnostics will acquire SBCL, including
its domestic and foreign clinical testing operations, clinical trials
testing, corporate health services, and laboratory information products
businesses. SBCL's national testing and service network consists of regional
laboratories, specialty testing operations and its National Esoteric Testing
Center, as well as a number of rapid-turnaround or "STAT" laboratories,
and patient service centers. SBCL had 1998 revenues of $1.6 billion.
As part of the agreement, Quest Diagnostics has granted SmithKline Beecham
certain non-exclusive rights to use its clinical laboratory information
database. In addition, Quest Diagnostics will receive a minority interest
in a company that SmithKline Beecham will form to sell health care information
products and services through various channels, including the Internet.
Quest Diagnostics will close the acquisition of SBCL when it has completed
satisfactory financing arrangements. Quest Diagnostics has sufficient
committed senior financing available to close the transaction. Upon closing,
SmithKline Beecham will receive approximately $1.0 billion in cash and
12.6 million newly issued shares of Quest Diagnostics' common stock, or
approximately 29.5% of the outstanding shares of Quest Diagnostics. SmithKline
Beecham will receive two seats on the Quest Diagnostics Board of Directors
and has agreed to certain standstill provisions in connection with its
ownership of Quest Diagnostics common stock.
Upon the closing of this transaction, Quest Diagnostics will be the nation's
leading provider of diagnostic testing, information and services to physicians,
hospitals, managed care organizations, employers and government agencies.
The wide variety of tests performed on human tissue and fluids help doctors
and hospitals diagnose, treat and monitor disease. Its Nichols Institute
unit conducts research, specializes in esoteric testing using genetic
screening and other advanced technologies, performs clinical studies testing,
and manufactures and distributes diagnostic test kits and instruments.
Quest Informatics collects and analyzes laboratory, pharmaceutical and
other data to help large health care customers better manage the health
of their patients. QuestNet is an innovative new product offering that
provides network management services to large buyers of health care services.
Additional information about the company is available on the Internet
at: www.questdiagnostics.com.
The statements in this press release which are not historical
facts or information may be forward-looking statements. These forward-looking
statements involve risks and uncertainties that could cause the outcome
to be materially different. Certain of these risks and uncertainties are
listed in the Quest Diagnostics Incorporated 1998 Form 10-K and subsequent
filings.
# # #
TOP