Zoetis Inc. (ZTS) and Abaxis, Inc. (ABAX) announced a definitive merger agreement pursuant to which Zoetis will acquire Abaxis, a leader in the development, manufacture and marketing of diagnostic instruments for veterinary point-of-care services for $83 per share in cash, or approximately $2B in aggregate. The acquisition is expected to enhance Zoetis' presence in veterinary diagnostics, a category of the animal health industry with approximately 10% compound annual growth over the last three years.

"This acquisition brings Zoetis a company that has a proven, competitive diagnostic platform for growth that we can help to accelerate in the U.S. and worldwide with our global scale and direct customer relationships in approximately 45 countries," said Juan Ramon Alaix, CEO of Zoetis. "Together we can bring more veterinarian customers a broader range of products that fit into our comprehensive solutions and innovations, from prediction and early detection of disease in animals to prevention and treatment. We are very excited by the passion for customers that Abaxis and Zoetis colleagues share."

The transaction is subject to customary closing conditions, including regulatory approvals and the approval of Abaxis shareholders. Zoetis expects to complete the acquisition before the end of 2018, and it intends to fund the purchase through a combination of existing cash and new debt. Zoetis anticipates the transaction will have an impact on 2018 reported earnings related to customary closing activities; however, on an adjusted basis, the company does not expect a material impact. Zoetis will provide additional updates as the transaction progresses towards closing. Zoetis expects the transaction to be accretive to the company's earnings in 2019.