Abbott Laboratories (NYSE: ABT) agreed to buy St. Jude Medical Inc. (NYSE: STJ) in a deal that values the maker of heart devices at $25 billion, making its biggest ever acquisition as the industry consolidates to gain bargaining power with hospitals. St. Jude Medical shareholders will receive $46.75 in cash and 0.8708 shares of Abbott common stock, representing a total of approximately $85 per share, according to a statement Thursday.

Medical devices makers are merging to get access to new technology as hospitals push for lower prices. St. Jude last year acquired Thoratec Corp. for $3.4 billion, adding left ventricular pump devices that take over for a failing heart.

The combined Abbott-St. Jude medical company will have a pipeline of new medical device products across cardiovascular, diabetes, vision and neuromodulation patient care, according to the statement.

Abbott said in the statement it has financing for both St. Jude Medical and for its planned acquisition of Alere Inc. (NYSE: ALR) for $5.8 billion, sending Alere shares higher in early trading. Abbott Chief Executive Officer Miles White declined to reiterate his commitment to the Alere deal last week on the company’s earnings call. Alere hasn’t yet filed its 10-K report with U.S. regulators and has been subpoenaed by the Justice Department.

St. Jude Medical closed yesterday at $61.95, giving the company a market value of about $17.6 billion. The stock jumped to $78.66 before the markets opened in New York. Abbott dropped 5 percent to $41.65 in early trading, while Alere rose 3.5 percent to $44.35. The acquisition will further reshape Abbott, which split off its brand name pharmaceutical business to AbbVie Inc. (NYSE: ABBV) in 2013. Since then, the company has shied away from major acquisitions and pursued many smaller deals, even as the CEO talked often about his desire for larger purchases.

Abbott has cash on hand, obtained by selling its generic drug business for medicines marketed in Europe and the developed world to Mylan NV (Nasdaq: MYL).