In a push to expand its eye care business, Johnson & Johnson (J&J) has agreed to pay nearly $4.33 billion in cash to buy Abbott Medical Optics (AMO), a wholly-owned subsidiary of Abbott Laboratories. Both companies are based in the US. The acquisition includes ophthalmic products in three business areas: cataract surgery; laser refractive surgery and consumer eye health. It gives J&J the number two business in cataract surgeries, a global market the company said is worth $8 billion and growing at about 5% a year.

AMO, which had sales of $1.1 billion in 2015, is a market leader in ophthalmic surgery, known for its intraocular lenses used in cataract surgery. Demand for cataract treatment is growing - the World Health Organization estimates that around 20 million people are blind from age-related cataracts with the condition affecting sight in at least 100 million eyes.

In addition, AMO offers laser vision (LASIK) technologies to enhance surgeon productivity and correct near- and far-sightedness and astigmatism. Its consumer products include over-the-counter eye drops as well as multipurpose solutions and hydrogen peroxide cleaning systems for contact lenses.

“Eye health is one of the largest, fastest growing and most underserved segments in health care today," said Ashley McEvoy, company group chairman, responsible for Johnson & Johnson's Vision Care companies, adding that the combination of Abbott Medical Optics' portfolio with the J&J contact lens business will create a broad-based leader in vision care.  “Importantly,” she said, “with this acquisition we will enter cataract surgery – one of the most commonly performed surgeries and the number one cause of preventable blindness."

The transaction, which Johnson & Johnson said should be modestly accretive to earnings immediately, is expected to close in the first quarter of 2017, subject to regulatory and other usual closing conditions.