Signup for our free newsletter:

GE (NYSE: GE) Snags 3 Thermo Fisher Scientific (NYSE: TMO) Units

Written By Brian Hicks

Posted January 7, 2014

There’s big news afoot from medical research, anaylisis, discovery and diagnosis company Thermo Fisher Scientific (NYSE: TMO). Multinational conglomerate General Electric (NYSE: GE) is set to acquire three business units from TMO, this includes the cell culture unit, which produces liquids used in biomedicine and vaccines, its gene modulation unit for drug research, and its magnetic beads businesses. Thermo Fisher Scientific to be acquired by General Electric%2C laboratory

The revenue from all of these businesses was about $250 million in 2013. Upon acquisition, these businesses will become part of GE Healthcare’s life sciences business. It will cost GE a grand total of $1.06 billion to acquire them.

GE wasn’t the only one who wanted to get its hands on these businesses, but GE is far larger than the other interested parties, and it is arguably the only one with the capacity to handle the potential growth of this property.

Thermo Fisher Scientific started the process of acquiring Life Technologies back in November. They will be able to takeover Life Technologies for $13.6 billion, provided they divest from its fetal bovine serum (FBS) business for antitrust reasons.

Why did they need to sell FBS?

Australian Competition and Consumer Commission (ACCC) commission Dr. Jill Walker had this to say:

The ACCC considered that in the absence of the undertaking, the proposed acquisition would substantially lessen competition for the supply of certain cell culture products, which are used to grow cells for academic research and vaccine production.

Our market inquiries identified concerns about the strength of the merger parties in relation to foetal bovine serum (FBS). Life Technologies and Thermo Fisher are two of the three main suppliers of FBS to customers in Australia.

With the final takeover, this could set TMO up to being one of the top genetic testing companies in the world.

The GE acquisition will also set up Thermo Fisher Scientific to secure European antitrust approval after its acquisition from Life Technologies.

About the TMO Stock

The TMO stock has a dividend yield of .06%. It’s PE ratio is 27.6. For the past 30 days, there’s been 1.5 million shares per day. The market cap is $36.2 billion. For the year, the stock is up 56.7%. This increase is way over that of the S&P 500 Index.

Analysts are saying that this is the perfect time to buy TMO because of its upward mobility potential. There are good things in the making right now, and if you’re an investor looking for a new stock to get into, it’s better to invest now than when the stock rises.

If you already have the stock, analysts are saying not to sell at all right now. Again, it’s revving to possible make a significant increase in the near future.

The only thing to keep your eye on is that even though it outperformed compared to the previous year, it still underperformed in comparison to the industry average by 7.2%. This might change with the new acquisitions though, but it’s still always good to keep your eyes open.

The other thing to watch is Thermo’s competition. While Life Technologies is a threat to its competitors, that could flip flop if Thermo isn’t careful. They need to invest their money wisely in the coming year, if they are going to be able to stay ahead.

Investing in TMO

As you can see the TMO stock is a hot one right now. As everything falls in place with GE’s acquisition and the takeover of Life Technologies, you will likely see a jump in returns. This will mean great things for investors.

If you’re looking for a new stock to sink your teeth into 2014, this may the one for you. It’s one of the biggest movers and shakers in the industry right now, and even though it didn’t outperform before, it sure is getting ready to do some big things this year.

Of course, always do your own research to come up with your own decision. There’s a ton of information out right now, and you’ll likely find it exciting to read.