Zimmer Divests to Satisfy European Commission on Biomet Deal

Zimmer Holdings, Inc. says it has proposed a remedy package to the European Commission (the “EC”) to facilitate the EC’s approval of Zimmer’s proposed acquisition of Biomet.

Background

Back in April we covered the news that Zimmer Holdings was to acquire Biomet for the princely sum of $13.35 billion. As is the way with these mega mergers, the authorities are keen to make sure they don’t introduce monopolies that could adversely impact the competitive nature of the market in question, so they enter into lengthy periods of negotiation, which can end up in the acquiring company having to offload some of its existing or soon-to-be portfolio of products. Such is the case this time, as Zimmer has been working closely with the EC to develop what they call a mutually acceptable solution to address the discrete concerns identified by the EC in its preliminary assessment of the transaction. The remedy package proposed by Zimmer includes divestiture of:

  • one unicompartmental knee brand
  • one elbow brand in the European Economic Area (“EEA”)
  • one total knee brand in two EEA countries.

The EC will market-test the proposed remedy package in the coming days. In parallel, the EC has “stopped the clock” on its review of the proposed merger.

So there you have it. Given a fair wind the transaction is expected to close in Q1 2015 although it remains subject to the expiration or termination of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, approval from the Japan Fair Trade Commission, as well as other customary closing conditions.

Source: Zimmer Holdings, Inc., PR Newswire

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