Abbott Labs received the FTC’s antitrust approval as the company is looking to acquire St. Jude Medical Inc.
Abbott Laboratories is a health care company. it was founded in 1888 and is based in Lake Bluff Illinois. The American company has spread and has an international outreach.
It currently operated in over 150 countries at a global level. Presently, Abbott Labs have about 74,000 employees. The company is specialized in various health-related domains.
Abbott has a wide range of medical devices and nutrition and diagnostics products. It also offers branded generic pharmaceuticals.
St. Jude Medical, Inc. is a medical device company. It was founded in 1976 and is based in Little Canada, Minnesota. The American manufacturer has reached an international recognition. It operates on the global market.
Its products are sold in over 100 countries, at an international level. Its manufacturing facilities and over 20 principle operations are also spread out globally. The United States, Asia-Pacific, and Europe are amongst St. Jude’s principle markets.
St. Jude is perhaps especially known for its heart valves and pacemaker devices.
Back in April 2016, Abbott Labs announced its intention of acquiring St. Jude. The sales deal was valued at an estimated sum of about $25 billion.
The FTC initially rejected the acquisition proposal. FTC is the United States Federal Trade Commission. The regulators went to explain their initial decision.
FTC was reportedly concerned about a potential market monopoly. A combination of the Abbott Labs and St. Jude markets could lead to more than 70 percent coverage.
The area to be such dominated targeted vascular closure devices. These have more than one usage. Vascular closure devices can close catheter insertion holes in the arteries.
They could also work as steerable sheaths. The latter can be used so as to guide catheters in heart arrhythmias cases.
FTC regulators noted that St. Jude is quite close as it is to a market monopoly. Abbott Labs, for their part, have recently started producing such devices. A collaboration between the two could lead to a closing off of the market.
In order to receive the FTC’s approval, Abbott Labs agreed to divest two future products. As such, it will be selling the St. Jude-produced vascular closure device business. It will also have to sell its steerable sheaths business.
These both could be sold to a Tokyo, Japan-based manufacturer. More exactly, they could be transferred to Terumo Corp.
The FTC also pointed out another fact. Back in 2014, Abbott Labs received approval for potentially buying ACT. ACT is the Advanced Cardiac Therapeutics. They are a lesion-assessing ablation catheters developer.
Both Abbott and St. Jude produce their own such devices. As such, the FTC will require an ACT acquisition deal. The respective market is quite limited. An acquisition could lead to another potential monopoly.
Abbott Labs will have to announce its final decision on the respective buy before proceeding with the acquisition.
For the moment, Abbott Labs will most likely continue with their St. Jude acquisition plans. They will be allowed to do so thanks to the FTC approval.
Final regulatory approvals are the last steps in closing the sale. Abbott is reportedly hoping to finalize it before the year ends. If that is not possible, the next target will be early next year.
Image Source: Wikimedia