EU Allows Big Pharma M&A with Strings Attached
Zimmer Holdings, United States (US) based medical device company, agreed last year to acquire orthopedic-device manufacturer, Biomet, for $13.4 billion. The deal had been held up by the European Commission, who oversees antitrust issues. The European Union (EU) was concerned that the merger would drive up prices for orthopedic implants and dampen competition in the market.
After a thorough investigation, the European Commission approved the deal today, contingent on the sale of three of the companies’ subsidiaries. Biomet will be required to sell two implant businesses in Denmark and Sweden, and Zimmer will be required to sell one implant business that operates across the EU.
The defensive stance of EU regulators mirrors similar changes in attitude among US regulators towards pharmaceutical industry mergers. Notably, the US Treasury Department and Federal Trade Commission (FTC) have strengthened their positions on perceived tax avoidance and antitrust business moves in the pharmaceutical industry.