European Commission Conditionally Approves Johnson & Johnson’s Acquisition of Synthes, Inc.

April 20, 2012 Author: Nicola Birney

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Yesterday the European Commission (the "Commission") cleared Johnson & Johnson's $21.3 billion purchase of Synthes, Inc., subject to a commitment by Johnson & Johnson to sell its trauma business to allay regulatory concerns.

The acquisition was notified to the Commission in September 2011, and in November the Commission announced that it would carry out an in depth investigation under the EU Merger Regulation (Regulation 139/2004) to consider whether the acquisition of Synthes would significantly impede effective competition in the European Economic Area.

Both companies are active in the area of orthopedic medical devices, and the Commission concluded that the acquisition would significantly impede effective competition in relation to trauma devices in a number of markets in different Member States.   To alleviate the Commission's concerns Johnson & Johnson offered commitments to the Commission in February, and has since agreed to sell its trauma business, operated by the DePuy Orthopaedics Inc. unit, to Indiana-based Biomet Inc for $280 million.  The Commission said it was able to clear the transaction because "this divestment removes the overlap in the area of trauma devices and thus the competition concerns".

Johnson & Johnson is still awaiting a decision on the acquisition from US antitrust regulators.  A non-confidential version of the Commission's decision will be available in due course.

For the Reuters' report, click here.  For the European Commission press release, click here.  Rod Lambertand Nicola Birney

Rod Lambert (rlambert@fulbright.com / +44 207 832 3606) is a partner and Nicola Birney (nbirney@fulbright.com / +44 207 832 3636) an associate in the healthcare practice of Fulbright & Jaworski International LLP in London.

 

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