US DOJ closes criminal probe into Abbott over baby formula, opting for civil penalties

Key Facts

In a move that reduces legal overhang on the healthcare sector, the US Justice Department closed its criminal probe into Abbott Laboratories (ABT) over its Sturgis, Michigan, baby formula plant, opting instead for civil penalties. The decision paves the way for a settlement that could resolve one of the industry’s most prominent regulatory cases, lifting the threat of criminal prosecution that had weighed on the company.

The investigation stemmed from the discovery of Cronobacter bacteria at the plant, which was linked to infant deaths in 2021, prompting Abbott to temporarily shutter the facility and issue recalls. After the plant reopened in 2022, the case remained unresolved until now. The civil penalties are part of a pending settlement aimed at avoiding harsher sanctions, though the final amount has not been disclosed, according to informed sources.

ABT stock closed at $94.12 on June 26, 2026, up about 1.2% over the past week per market data. Analysts view the removal of legal uncertainty as supportive for the stock in the near term, but attention now shifts to second-quarter results and the eventual civil fine, as well as any further regulatory developments in the infant formula sector.