Medical products and drug maker Abbott Laboratories (NYSE: ABT) announced on Monday that it would acquire California-based contact lens solution makers, Advanced Medical Optics (NYSE: EYE) for $22 a share, or about $2.8 billion in cash.

The deal represents a premium of nearly 150% over Advanced Medical Optics' closing price of $.8.85 on Friday. Abbott will purchase all of AMO's 62 million shares for $1.36 billion and assume the company’s debt. Advanced Medical Optics had $57.1 million debt in September 2008.

Abbott noted that AMO is the world's largest firm in Lasik surgical devices, No. 2 in the cataract surgical-device market and No. 3 in contact-lens care products. Abbott Chief Executive Officer Miles D. White said in a statement “Abbott’s significant global presence will help drive growth opportunities for this business, especially in international markets, where favorable demographics are driving demand for advanced eye care procedures and products.”

"The business is poised for long-term growth, driven by advances in refractive surgery technologies, including LASIK, and an aging global population,” said John M. Capek, executive vice president, Medical Devices, Abbott "With AMO, Abbott will immediately become a global leader in vision."

Jim Mazzo, Chairman and Chief Executive Officer, AMO, who has been retained with Abbott as president, AMO stated "This transaction underscores the fundamental value of the AMO franchise, the talent and expertise of our global team, and the strength of our product offering, pipeline and strategy to provide refractive vision care for people of all ages. 
Joining forces with Abbott will fortify our position as a global ophthalmic medical device leader and enhance our ability to serve eye care practitioners and patients around the world."

Additionally, Abbott Laboratories said in a statement that for full fiscal year 2009, it expects to earn in the range of $3.65 to $3.70 a share for 2009, matching the consensus estimates. The company said that the deal won’t affect the 2009 profit and will only boost earnings in 2010.

The companies expect the deal to close in the first quarter of 2009.

Advanced Medical Optics soared $12.88 or 145.4% to $21.72. Shares of Abbot Laboratories fell 57 cents or 1.11% to $50.60.A

Disclosure: Author does not own any of the stocks discussed here.