The Federal Trade Commission says Medtronic can move forward with a proposed acquisition so long as the company promptly divests a subsidiary that makes certain medical devices used in sinus procedures.

In a proposed order this week, FTC imposed the condition on Medtronic's planned $936.2 million acquisition of Intersect ENT Inc., a California-based maker of sinus implants. The deal was first announced last year.

FTC says that Medtronic, which is based in Dublin but has operational headquarters in Fridley, would need to promptly sell a subsidiary of Intersect ENT called Fiagon, which makes ear, nose and throat navigation systems and balloon sinus dilation products.

The FTC said the Fiagon business would be sold to Hemostasis LLC, which is based in White Bear Lake, according to a news release announcing the proposed order.

"Medtronic is the top provider of ear, nose and throat navigation systems," said Holly Vedova, director of the FTC's bureau of competition, said in a statement. "We are requiring Medtronic to divest Fiagon because we are concerned that the deal would otherwise lead to higher prices and reduced innovation in this important medical care market."

The commission voted 4-0 to issue an administrative complaint in the case and accept the proposed consent order for public comment. The FTC soon will publish the consent agreement in the Federal Register and take comments over a 30-day period.

Medtronic said Thursday that the acquisition is expected to close during its first quarter, which ends July 29.

"Since the announcement of our intent to acquire, we have worked with the FTC and respect the commission's decision regarding the divestiture of the Fiagon subsidiary," the company said. "We will announce further details following a successful close."

Medtronic is the dominant provider of ear, nose and throat (ENT) navigation systems, which the FTC says allow physicians to view and track medical instruments as they're being used in sinus procedures. The company also sells balloon sinus dilation products used to clear blocked sinuses.

FTC's proposed order says Fiagon must be sold no later than 10 days after Medtronic acquires Intersect. In addition, to prevent future consolidation, Medtronic and Intersect over the next decade must obtain prior approval from FTC to acquire additional technology for ENT navigation and balloon sinus dilation.

"Divestiture buyer Hemostatis must obtain prior approval for three years before transferring any of the divested assets to any buyer, and for seven additional years before transferring any divested assets to a buyer that manufactures and sells ENT navigation systems or balloon sinus dilation products," FTC said in a statement.

A independent monitor will report on the companies' compliance with the order, FTC says.