The commission will either clear the merger, ask Medtronic to sell off some assets to lessen anti-competitive concerns or launch a more in-depth review. Medtronic and Covidien have said they expect to close the deal late this year or early in 2015.
Medtronic, which last week announced the post-merger leadership team, altered the structure of the deal earlier this month after the U.S. Treasury Dept. changed the rules governing inversion deals in which an American company buys a foreign firm and reincorporates under another nation’s lower tax rate. Medtronic had planned to fund a large portion of the deal with roughly $13 billion in cash it’s parked offshore to avoid U.S. income taxes, but now plans to fund that portion of the deal with new debt.
The deal is already under the scrutiny of American anti-trust regulators. The U.S. Federal Trade Commission in August asked for more information from the companies.
Earlier this month the EuroZone commission extended its look at another medtech mega-merger, the proposed $13.4 billion union of Zimmer (NYSE:ZMH) and Biomet. U.S. regulators asked Zimmer and Biomet for more on their merger in July and their counterparts in Japan are also looking at the Zimmer-Biomet deal.
Today Steris revealed the 1st inversion deal announced since the Treasury’s stricter rules went into effect, saying it would pay $1.9 billion for British sterilization services provider Synergy Health.