Medtronic Inc.'s proposed $42.9 billion acquisition of Ireland-based Covidien is a step closer to completion with a proposed settlement announced Wednesday by the Federal Trade Commission.
The FTC had said the acquisition likely would be anticompetitive because both companies are developing products to compete in the U.S. market for drug-coated balloon catheters, which are used to treat patients with peripheral artery disease.
To address the concern, Covidien announced in October that it would sell its business unit to a Colorado company called the Spectranetics Corp. On Wednesday, FTC said the sale could resolve the trade commission's concerns.
"This regulatory clearance represents an important milestone in bringing our companies together," Omar Ishrak, the Medtronic chief executive, said in a statement.
Currently, only C.R. Bard Inc. of New Jersey has approval in the United States to sell drug-coated balloon devices for treating peripheral artery disease, according to the FTC.
The commission voted 5-0 to accept the proposed consent order for public comment. The agreement will be published in the Federal Register and subject to a public comment period through Dec. 29. After that date, the commission will decide whether to make the proposed consent order final.
In its statement, Medtronic said it has also entered into a parallel agreement regarding the divestiture of Covidien's drug-coated balloon catheter business with the Canadian Competition Bureau, which also announced its clearance of the transaction Wednesday.
Medtronic's acquisition of Covidien is expected to close in early 2015, after receipt of certain other regulatory clearances plus shareholder approvals. Shareholders of both companies are scheduled to vote on the deal Jan. 6.
