Stryker was given the greenlight for its acquisition of Wright Medical by the UK Competition and Markets Authority after agreeing to the sale of its ankle prosthesis business
Medical device giant Stryker Corporation has agreed to sell its total ankle replacement product line and assets in order to satisfy regulators and clear the way for its acquisition of Wright Medical.
The UK Competition and Markets Authority (CMA) had intially raised concerns that the incorporation of Wright Medical into Stryker’s portfolio would give the firm 90% of the country’s total ankle replacement prostheses market – leading to higher prices and less choice for hospitals and patients.
But an offer from the buyer to sell its Scandinavian Total Ankle Replacement (STAR) product line has appeased the regulator enough to get approval of the acquisition.
CMA Senior Director of Mergers Joel Bamford said: “Competition in the medical device sector is vital to improve patient treatments, particularly for medical products designed to help vulnerable people suffering from serious degenerative conditions.
“The close cooperation with the FTC’s inquiry and early engagement with both companies has enabled Stryker to address our important concerns about this deal and has led to an outcome that works on a global basis.”
Stryker acquisition deal for Wright Medical
The £4.2bn ($5.5bn) acquisition deal for Wright Medical was announced by Stryker on 4 November 2019, but after a phase 1 investigation from the CMA conducted in May determined the move would stifle competition in the UK ankle prosthetic market, the buyer suggested the sale of its total ankle replacement line.
An additional concern when making this decision was the view of the US Federal Trade Commission (FTC), but with the agency having approved the acquisition yesterday (3 November), the sale appears to have satisfied both regulators.
Stryker chairman and CEO Kevin Lobo said: “We are pleased to receive the necessary regulatory approvals for the proposed acquisition of Wright Medical and to be moving ahead with the offer to the company’s shareholders.
“Wright Medical has built a successful business, and together we look forward to working with customers to continue delivering solutions that improve patient outcomes.”
Colfax Corporation (Colfax) is the buyer for Stryker’s total ankle replacement business and will incorporate it into its subsidiary DJO Global.