U.S., E.U. and Canada Green-Light Medtronic-Covidien Deal

U.S., European and Canadian regulators have green-lit Medtronic Inc.’s much-anticipated acquisition of Dublin, Ireland-based Covidien plc. The approvals follow Covidien’s sale of its Stellarex drug coated balloon device to Spectranetics Corp., which was agreed upon in early November.

The U.S. Federal Trade Commission (FTC) and European Commission (EC) have okayed the deal on the condition that Medtronic divest Covidien’s drug coated balloon business, as both companies had devices in the clinical trial stage that were very similar to each other. The drug-coated catheters in development treat peripheral artery disease. Stellarex would compete with Medtronic’s drug coated balloon device In.Pact. when released.

The EC was previously concerned that the acquisition would remove a credible future competitor of Medtronic, and therefore reduce innovation. Selling Stellarex to Spectranetics Corp. for $30 million addresses this issue, and under a proposed consent order, a monitor will supervise the transfer of Covidien’s drug-coated catheter business to the Colorado Springs, Colo.-based company.

The FTC and Health Canada approved the deal on Nov. 26, the FTC with a 5-0 vote. Two days later, the EC followed. Medtronic officials said it still awaits Chinese approval.

The $43 billion transaction is expected to close in early 2015 after receipt of certain additional regulatory clearances, approvals by both companies’ shareholders and sanction by the High Court of Ireland.