Recently, St. Jude Medical and Abbott announced that they were strengthening their alliance to sell cardiovascular devices in the US. This announcement follows widespread speculation that the two companies would merge both companies have strong product portfolios but do not have the breadth of product lines on their own to compete with the big name cardiovascular companies such as Medtronic and Boston Scientific. Specifically, St. Jude Medical offers a strong electrophysiology and cardiac surgery product portfolio, while Abbott exceeds in the interventional cardiology space, particularly with its well-known line of XIENCE drug-eluting coronary stents. Because the two companies product portfolios complement each other so well, Abbott and St. Jude Medical have historically been selling their products together to hospitals. This recent announcement makes that arrangement more official, allowing Abbott and St. Jude Medical to cross-sell each other's products when creating contracts with hospitals in the US. Having attractive product bundles is becoming increasingly important in the US given the rise of group purchasing organizations, which purchase for multiple hospitals in bulk.
It's unlikely, however, that this will make a huge difference in the cardiovascular device market given the fact that the two companies were already working pretty closely together but it does save the industry from speculating the effect of a St. Jude-Abbott merger.