European regulator conditionally approves Abbott's $25-bn deal for St Jude Medical
24 Nov 2016
The European Commission yesterday conditionally approved US medical device maker Abbott Laboratories' proposed acquisition of St Jude Medical Inc.
The European Commission (EC) said that its approval was conditional on "Abbott divesting two devices used in cardiovascular treatments."
The EC's investigation focused on the two areas of cardiovascular devices where Abbott and St Jude compete - vessel closure devices and devices used in electrophysiology procedures, in particular transseptal introducer sheaths.
The investigation showed that the combination of Abbott and St Jude's range of vessel closure devices could have led to price rises, given the insufficient competitive pressure from the remaining players on the market.
Prior to the merger, St Jude was the leader in the transseptal sheaths market, while Abbott had developed a product, Vado, which has the potential to become a strong competitor and challenge St Jude's position. The EC had concerns that Abbott might abandon the launch of Vado after the transaction, thereby depriving doctors and patients of additional choice due to less competition.
In order to address EC concerns, Abbott offered to fully divest St Jude's global vessel closure devices business, including its manufacturing site in Puerto Rico, and divest the whole of Abbott's Vado business, including its shareholding in Kalila Medical, the company which developed Vado.
Kalila Medical was acquired by Abbott in early 2016 but was not subsequently integrated into Abbott operations.
In April, Abbott Laboratories agreed to buy St Jude Medical for $25 billion in order strengthen its heart and neurological devices business. (See: Abbott to buy medical device maker St. Jude Medical for $25 bn)
Founded in 1976 and based in St. Paul, Minnesota, St Jude Medical, which is named after Jude the Apostle, is a medical device maker focused on six key treatment areas - heart failure, arrhythmias, vascular disease, structural heart, chronic pain, and neurological diseases.
It manufactures implantable cardioverter-defibrillators, pacemakers, electrophysiology catheters; vascular closure products; cardiac mapping and visualization systems, optical coherence tomography imaging systems; structural heart repair products, and neurostimulation devices.
It has more than 20 operations and manufacturing facilities worldwide and its products are sold in more than 100 countries.
Its major markets include the US, Europe, Latin America and Asia-Pacific, and has annual sales of around $5.6 billion.
