The Federal Trade Commission says Medtronic can go through with a proposed acquisition as long as the company immediately divests a subsidiary that makes certain medical devices used in sinus procedures.
In a proposed order this week, FTC imposed the condition on Medtronic’s planned acquisition of Intersect ENT Inc. for $936.2 million from Intersect ENT Inc., a California-based sinus implant manufacturer. The deal was first announced last year.
FTC says Medtronic, which is based in Dublin but has operational headquarters in Fridley, must immediately sell an Intersect ENT subsidiary called Fiagon, which makes ear, nose and throat navigation systems and balloon sinus dilation products.
The FTC said the Fiagon business would be sold to Hemostasis LLC, which is based in White Bear Lake, according to a press release announcing the proposed order.
“Medtronic is the largest supplier of ear, nose and throat navigation systems,” Holly Vedova, director of the FTC competition office, said in a statement. “We are demanding that Medtronic divest Fiagon as we fear the deal would otherwise lead to higher prices and less innovation in this important medical care market.”
The committee voted 4-0 to file an administrative complaint in the matter and accept the proposed consent warrant for public comment. The FTC will soon publish the consent agreement in the Federal Register and include comments over a 30-day period.
Medtronic said Thursday that the acquisition is expected to close in the first quarter, which ends on July 29.
“Since announcing our intent to acquire, we have worked with the FTC and respect the commission’s decision regarding the divestiture of the Fiagon subsidiary,” the company said. “We will announce more details after a successful close.”
Medtronic is the dominant supplier of ENT (ear, nose, and throat) navigation systems, which the FTC says allows doctors to view and track medical instruments as they are used in sinus procedures. The company also sells balloon sinus dilation products that are used to clear blocked sinuses.
FTC’s proposed order states that Fiagon must be sold no later than 10 days after Medtronic acquires Intersect. In addition, to avoid future consolidation, Medtronic and Intersect must obtain pre-approval from FTC within the next decade to acquire additional technology for ENT navigation and balloon sinus dilation.
“Divestiture buyer Hemostatis must obtain pre-approval for three years before transferring any of the Divested Assets to a buyer, and for an additional seven years before transferring Divested Assets to a buyer that manufactures and sells ENT navigation systems or balloon sinus dilatation products,” FTC said in a statement. declaration.
An independent monitor will report on the companies’ compliance with the warrant, FTC says.