The Federal Trade Commission announced today that it plans to allow Stryker (NYSE:SYK) to proceed with its planned $4.7 billion acquisition of Wright Medical (NSDQ:WMGI), provided that Stryker divest certain assets to Colfax (NYSE:CFX)/DJO Global.
Stryker had proposed selling assets to DJO Global about two months ago as a way to allay FTC concerns that the deal would result in substantial competitive harm to U.S. consumers. The FTC in its complaint noted that Wright and Stryker are the largest and the third-largest suppliers of total ankle replacements in the United States — and that the merged company without remedy would control three-fourths of the domestic market.
The proposed consent agreement with the FTC has Stryker selling its total ankle replacements and finger joint implants businesses to DJO Global to preserve competitiveness in the two spaces. The FTC will decide whether to make the proposed consent order final after a 30-day public comment period.
The FTC also noted that its staff worked closely with the U.K. Competition and Markets Authority to analyze the proposed transaction and proposed remedy.
Stryker first announced its plans to buy Wright Medical in November 2019.