What: St. Jude Medical (NYSE:STJ) is up about 28% at 11:30 a.m. EDT on news that the medical-device maker agreed to be acquired by Abbott (NYSE:ABT).

So what: The deal calls for Abbott to pay St. Jude Medical's shareholders $46.75 in cash and 0.8708 shares of Abbott for each share of St. Jude Medical. That values St. Jude Medical's shares at a hair under $85 based on yesterday's closing price, and under $83 per share based on the current price of Abbott, which has fallen 2.3% as of 11:30 a.m. EDT.

From a sales standpoint, joining forces makes a lot of sense. According to Abbott, the combined company "will hold the number 1 or 2 positions across large and high-growth cardiovascular device markets and will compete in nearly every area of the market."

And of course, there's the ability to save money by reducing repetitive expenses by $500 million per year by 2020. Abbott estimates that adding St. Jude Medical will increase earnings by $0.21 per share in 2017 and $0.29 per share in 2018.

Now what: In an all-cash deal, investors can just wait to sell until the risk of the deal falling through doesn't justify the difference between the current share price and the acquisition price.

In a deal that involves getting shares from the acquiring company, the decision is a little more complicated because the daily changing stock price of the acquiring company will affect the acquired company until the acquisition goes through.

Investors who have confidence in Abbott can continue to hold, perhaps even taking shares of the combined company in the exchange. Those who don't have confidence shouldn't look a gift horse in the mouth and should feel free to sell their shares now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.