Abbott, a large American manufacturer of pharmaceuticals and medical products, is entering the ophthalmic sector by acquiring Advanced Medical Optics for $22 per share in cash. The total value is about $2.8 billion, including estimated net debt. Advanced Medical Optics' shares closed at $8.85 per share just before the deal was announced.

Jim Mazzo will remain in his position as chairman and chief executive. Abbott plans to launch a tender offer on Jan. 26 to purchase all of the approximately 62 million shares outstanding of AMO. Both companies' boards have approved the deal, which should close in the first quarter.

Before the deal was announced, 50 senior managers from AMO voluntarily gave up a total of almost 800,000 stock options to reduce the costs that would have been associated with their initial fulfillment. Also, Douglas Post, who left his full-time position as executive vice president and president of AMO's corneal refraction group, signed a one-year consultancy deal with the company.

AMO, a leader in contact lens solutions, LASIK and cataract surgery, will benefit from Abbott's international presence. AMO has been looking for higher economies of scale. It made an unsuccessful bid to acquire Bausch & Lomb in 2007, a year in which its results suffered considerably from the withdrawal of two of its contact lens solutions from the market. It made a nice recovery in the first nine months of 2008, when it booked a net profit of $36 million on 14.4 percent higher sales of $899.9 million.