AMO & VISX: Number one in Refractive Surgery

Advanced Medical Optics, a specialist in ophthalmic surgery, has acquired Visx , the largest manufacture of lasers for vision correction surgery, for a combination of cash and stock worth $1.27 billion. Analysts were surprised by the magnitude of the deal, following so soon on the heels of AMO's $450 million purchase of the ophthalmic surgical business of Pfizer in April, which brought it products for the cataract and glaucoma markets. However, this is not simply the merger of two major ophthalmic companies for the purpose of achieving critical mass; the two companies operate in distinct, largely non-overlapping markets, and to all appearances fit together like hand in glove.