U. S. pharmaceutical firm Abbott has finally decided to buy Advanced Medical Optics (AMO) for around US$2.8 billion including debt.

Under terms of the agreement, Abbott will acquire Advanced Medical Optics for $22 per share, which indicates premium of approximate 250% over the Friday's closing price of $8.85.

Advanced Medical Optics, based in Santa Ana, California, is known for its eye care products, along with devices for cataract surgery and laser-vision correction. The firm holds the first position in Lasik surgical devices, the second position in the cataract surgical device market and the third position in contact-lens care products.

Further, Abbott has confirmed its 2008 earnings-per-share outlook of US$3.31-US$3.33, excluding items. The pharmaceutical firm for 2009 sees US$3.65-US$3.70 in earnings per share.

It may be noted that, the 2009 forecast includes the AMO acquisition. Both companies expect the acquisition to close in the first quarter of 2009, thus having no significant effect on the next year's earnings.