In short
Following the recent news that Johnson and Johnson (J&J) was divesting its DePuy trauma business to Biomet as a concession to the EU’s competition legislators, it has now been announced that an EU Competition Commission has given the green light to its takeover of Swiss company Synthes.
Background
Last year J&J and Synthes announced that their respective boards had agreed for the former to acquire the latter in a mind-blowing $21.3Bn transaction. One of the hurdles to the acquisition was the gaining if EU Competition Commission blessing for the deal which was due to be concluded one way or the other by April 26th. A month ago we covered leaked reports suggesting that the EU Commission would deliver the thumbs up, which it now seems has occurred.
As a concessionary measure J&J announced recently that it was to divest its existing trauma business in a $280M deal with Biomet, which is resulting in the division being uprooted and replanted in expedient fashion. Now the EU Commission has concluded that the J&J/Synthes merged entity will continue to face competition, not least in the shape of its former employees, albeit wearing new badges.
The remaining hurdle is U.S Antitrust legislation. According to Bloomberg, J&J is said to be “actively working with” U.S. regulators who have not yet approved the Synthes acquisition, according to company spokesperson Lorie Gawreluk. J&J was required to seek approval from five regulatory agencies and has now received clearance from Japan, Canada, China and the EU, she said. J&J expects the Synthes deal to close by end-June 2012.
Commission comments
“We obtained remedies to ensure that competition will remain strong in these markets, for the ultimate benefit of patients and social security systems,” said EU Competition Commissioner Joaquin Almunia in a statement.
Source: EU Commission, Bloomberg, medlatest staff
published: April 23, 2012 in: DePuy, Johnson & Johnson, Mergers and Acquisitions, News, Trauma