GE abandoning $8bn medical deal

The news is a blow to GE's ambitions

General Electric (GE) has pulled out of an $8.1bn (£3.98bn) deal to buy the diagnostics arm of Abbott Laboratories after failing to agree terms.

The deal, first announced in January, would have given the firm a major presence in the lucrative laboratory and bedside equipment testing sectors.

The transaction had been approved by both US and European regulators.

GE has been refocusing its business, exiting lower-growth manufacturing areas in favour of energy and health.

"GE and Abbott worked diligently to complete the transaction but were unable to reach agreement on final terms and conditions," GE said in a statement.

Health now accounts for nearly 15% of GE's profits, a share which would have increased significantly as a result of the deal.

But news that the deal had collapsed seemed to be welcomed by analysts - some of whom had questioned the cost and logic of the deal - with shares in both companies rising in response.