EU Approves Medtronic's $43 Billion Merger With Covidien

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 [e-mail]

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