By Tom Fairless
BRUSSELS--Medical-device maker Medtronic Inc. secured European
Union approval Friday for its $43 billion merger with rival
Covidien PLC of Ireland, subject to conditions, two days after U.S.
authorities cleared the deal.
The European Commission, the EU's top antitrust authority, said
the transaction could go ahead provided the companies sell
Stellarex, a drug-coated balloon being developed by Covidien.
The commission said the deal raised competition concerns in the
market for drug-coated balloons, where it said there were few
competitors to put pressure on the market leader, Medtronic.
"It is likely that Covidien would have constrained Medtronic in
the near future, in view of the promising first clinical trials'
results of Stellarex," the commission said. "The acquisition, as
initially notified, would therefore have eliminated a credible
competitor."
The merger, combining two of the world's largest
surgical-implant and hospital-supply companies, remains on schedule
to close in early 2015, Chief Executive Omar Ishrak said this
month. The companies plan to hold a special meeting in January to
seek shareholder approval of the merger.
Medtronic's plan to buy Covidien, based in Dublin, has drawn
scrutiny over a tax tactic criticized by U.S. government officials.
The acquisition plan involves Medtronic reincorporating from
Minneapolis to Ireland, which would lighten the company's tax
burden.
Alan Zibel in Washington contributed to this article.
Write to Tom Fairless at tom.fairless@wsj.com
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