British anti-trust regulators approved the $1.7 billion acquisition of ArthroCare (NSDQ:ARTC) by Smith & Nephew (FTSE:SN, NYSE:SNN), ArthroCare said yesterday, clearing the way for a closing by May 29.
The U.K.’s Competition and Markets Authority granted "unconditional clearance" for the merger yesterday, ArthroCare said in a regulatory filing.
"The proposed merger is no longer subject to receipt of antitrust approvals after previously receiving clearance from the relevant authorities in the United States and Germany. The parties expect to close the merger no later than May 29, 2014," according to the filing.
The deal, announced Feb. 3, calls for Smith & Nephew to pay $48.25 per share for ArthroCare. ARTC shares spiked on news of the pact as investors speculated that rivals could emerge to try to top the British medical device giant’s bid.
Smith & Nephew said at the time that it expects the ArthroCare acquisition to add roughly $85 million to its annual trading profit after integration, slated to be complete in about 3 years. The merger is projected to cost about $100 million over 3 years, the company said. Smith & Nephew plans to finance the deal by tapping a $1 billion credit revolver and a new, $1.4 billion term loan; the deal also means a halt for its $300 million share buyback program, with some $226 million spent so far.
An acquisition became more feasible for ArthroCare early this year, when it agreed to pay $30 million to settle a $400 million fraud case with the U.S. Justice Dept. The Jan. 7 deal put to rest a years-long probe into an alleged scheme designed to generate false revenue numbers to meet internal and external forecasts by dumping inventory, first with a distributor called DiscoCare and eventually via free shipments to end-users.
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