The Federal Trade Commission approved the union under the condition that J&J sell its wrist fracture treatment business to Biomet Inc.
"J&J and Synthes are direct competitors for these important systems used in the surgical treatment of traumatic wrist fractures," FTC Competition Bureau director Richard Feinstein said in prepared remarks. "This order will ensure that the hospitals and surgeons that use these systems to care for consumers will not face higher prices or reduced innovation in the future."
The devices, called volar distal radial plating systems, represent a highly concentrated market in the U.S., according to the FTC report. Together, J&J and Synthes represent 70% of the U.S. market for the devices.
The requirement that J&J ditch its wrist fracture operation follows the device giant’s move in April to sell its entire trauma portfolio to Biomet for $280 million in cash – in that case, to mollify EuroZone anti-trust officials. The sale, which was finalized in May, also prompted Eurozone regulators to approve the merger.
The deal could close as soon as this week, Reuters reported.
"We obtained remedies to ensure that competition will remain strong in these markets, for the ultimate benefit of patients and social security systems," EU Competition Commissioner Joaquin Almunia said in the statement.
After the trauma sale to Biomet, the European regulators unanimously approved the J&J/Synthes merger. In the U.S., the decision will be subject to public comment for 30 days, after which the FTC will decide whether to finalize the order.
It’s been more than a year since J&J’s CHF 159-per-share offer for the Swiss orthopedics giant. EU regulators expanded their probe into the deal last November, prompting J&J to seek ways to appease the commission.
JNJ shares closed down 1.4% yesterday, trading at $62.12, but were up 0.05% to $62.15 in after hours trading as of about 6:20 p.m. The stock opened up a hair at $62.16 before subsiding to $61.94 as of about 9:40 this morning.