Posted in Orthopedics by Nancy Crotti on November 18, 2014
Zimmer Holdings Inc. (ZMH) has agreed to extend the European Commission’s review of its pending $13.4-billion merger with Biomet, Inc. “by a limited number of days,” according to a statement to Zimmer investors.
Zimmer said it agreed to the extension “in order to provide the EC with certain additional information.” The company did not disclose the length of the extension or the type of information it would provide to the EU.
“Deadline extensions are not uncommon in such in-depth investigations,” the statement said. “Zimmer has been working closely with the regulatory authorities to facilitate their review of the pending transaction and is encouraged by the substantial progress that has been made to date in connection with the overall regulatory process.”
The agreement extends the EU’s probe beyond its March 11, 2015 deadline, Zimmer said. The company expects to close the cash-and-stock transaction in the first quarter of 2015. Doing so would make the newly formed Zimmer Biomet the world’s second-largest orthopedic products group, a prospect that has also sparked investigations by the U.S. Federal Trade Commission and the Japan Fair Trade Commission. The U.S. FTC extended its investigation in July. Zimmer and Biomet are each based in Warsaw, IN.
Biomet, which makes dental implants, and artificial hips and knees, had filed plans earlier this year for an initial public offering, partly to pay off debt from its 2007 buyout, according to a report by the Wall Street Journal. The proposed merger with Zimmer put the kibosh on that.
The sale was first announced in April. In a deal approved by both companies’ boards, Zimmer would pay $10.4 billion in cash and $3 billion in stock to acquire Biomet, giving that company’s private equity backers a 16% stake in the combined company, according to a report by Law.com. Zimmer has said it expects to realize cost synergies of $270 million annually by the third year after closing.
Larry Biegelsen, an analyst at Wells Fargo Securities in New York, told Reuters in October that Zimmer would probably offer to make divestments, potentially spinning off products to repair knees and shoulders, because the combined firm would have a high market share in these fields.
Refresh your medical device industry knowledge at BIOMEDevice San Jose, December 3-4, 2014.
