KODAK DEAL TO HELP J&J DIVERSIFY

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Johnson & Johnson's $1.01 billion purchase of Eastman Kodak Co.'s Clinical Diagnostics business will help each company reach opposite goals.

For J&J, the proposed acquisition, announced last week, will help the drug and personal-care marketer further diversify its businesses. Just as with its $924 million Neutrogena Corp. buy proposed several weeks ago, Clinical Diagnostics will expand J&J while dovetailing nicely with current products.

Meanwhile, Kodak is closer to its goal of focusing on core imaging businesses. Kodak has already agreed to sell the Sterling Winthrop non-prescription drug business to SmithKline Beecham for $2.93 billion and its prescription drug business to Sanofi for $1.7 billion.

J&J already has blood virus screening and diagnostic products used in blood donor centers, hospitals and other laboratories. Clinical Diagnostics, with $535 million in sales, will add significantly to that with its machines for testing for specific diseases.

Clinical Diagnostics products are not and will not be marketed directly to consumers, but J&J is trying to grow its home testing products as well. The company offers One Touch testing for diabetes, Fact Plus for pregnancy and Advanced Care for cholesterol. It now has a home HIV test under review with the Food & Drug Administration (AA, May 23).

"This acquisition fits perfectly our strategic objective of enhancing our business in diagnostic products," said Ralph S. Larsen, J&J chairman-CEO.

A spokesman declined to say whether J&J is pursuing other acquisitions. For Kodak, the only large business still on the block is its L&F household products unit.

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