This has been rumored for some time - LabCorp to buy Genzyme

Laboratory Corp. of America Holdings (LH) has agreed to buy the genetic testing business Genzyme Corp. (GENZ) for $925 million as the medical-testing giant looks to expand into areas such as reproductive medicine and oncology.

Meanwhile, the sale comes as Genzyme has been struggling for more than a year with manufacturing problems at its most important plant, crimping supply of its two biggest drugs. As such, Genzyme in May said planned to shed three noncore operations--including genetic testing--by year's end "strategic alternatives" for three units while repurchasing $2 billion of stock.

Genzyme said Monday that proceeds from the genetic-testing sale would go toward that end. The company's stock-market value is about $18 billion. Divestiture of the other two units--diagnostics and pharmaceutical intermediates--remains on track, said Genzyme.

"This acquisition will substantially expand our capabilities in reproductive, genetic, hematology-oncology and clinical trials central laboratory testing," said David P. King, chairman and chief executive of LabCorp.

Genzyme Genetics performs more than 1.5 million tests a year. It had about $371 million in revenue in 2009.

LabCorp in July said its second-quarter profit rose 13% following prior-year charges as revenue improved more than expected.

Genzyme closed at $70.79 Friday while LabCorp finished at $76.65. Neither traded premarket.