St. Jude Medical (NYSE: STJ), based in MN, United States has been acquired by Abbott Laboratories (NYSE: ABT) for a sum of US $25 billion. With over 18000 employees worldwide, St. Jude Medical is a popular medical device firm and the merger signals positive trend since both the companies are part of medical field.

Soon after the news of the merger broke, the St. Jude stock soared in premarket trading after news which spread like viral about the receipt of $85 per share in cash and Abbott stock for every shareholder of St. Jude.

This is a sharp increase than the previous day’s $61.95 closing price, which is a 37 percent premium.┬áThe merger deal has been worked out in such a way that Abbott will spend $19.3 billion and assume about $5.7 million in St. Jude debt.

Responding to media queries, Abbott, based in North Chicago revealed that the merger will help both companies to become a major leader in every sector of the cardiovascular device market. The merger is all set to blend St. Jude’s heart failure devices and cardiac rhythm management business with Abbott’s coronary intervention and transcatheter mitral repair products.

In addition to medical devices and drugs, Abbott manufactures infant formula and nutritional beverages, which includes the Similac, Ensure and Pedialyte brands. Abbott, in February stated that the company would spend $4.8 billion on Alere Inc to expand its medical testing business.

Even though Abbott stated that the deal is expected to close in Q4 2016, the acquisition should be reviewed by regulators and approved by St. Jude shareholders.

While the shares of Abbott sank more than 7 percent, or $3.21, to $40.62 in premarket trading, St. Jude shares jumped more than 25 percent, or $15.79, to $77.74. If you look at the overall picture, Abbott shares had slid about 2 percent in 2016.

However, St. Jude stock climbed less than 1 percent. It remains to be seen as to whether there will be any layoffs as a result of the merger deal.