EU regulator conditionally approves Baxter’s $4-bn Gambro acquisition

The European regulator yesterday conditionally approved US drug and medical-products maker Baxter International's proposed $4-billion acquisition of Swedish dialysis product company Gambro AB.

The European Commission (EC) approved the deal on condition that Baxter will sell its global continuous renal replacement therapy (CRRT) business, which generates about 2 per cent of its renal product sales.

The EC said that it had concerns that the transaction combined two of the leading suppliers of CRRT equipment and consumables leading to very high market shares in a significant number of member states.

The EC's investigation also showed that the merged entity would not face sufficient competitive constraints from other suppliers and that customers would have faced difficulties to switch to alternative suppliers.

In December 2012, Illinois-based Baxter proposed to buy Gambro from two Nordic private equity firms EQT and Investor AB for about $4 billion in cash in order to expand its renal therapies portfolio. (See: Baxter International to buy Swedish dialysis product company Gambro for $4 bn)

The sale of its global CRRT business includes employees, supply agreements, intellectual property rights, product and marketing authorisations and customer portfolio.

In addition, Baxter has undertaken to set up a line for the production of fluids used in CRRT at a location of the purchaser's choice in the European Economic Area or Switzerland.

Baxter develops, manufactures and markets products used in the treatment of patients suffering from haemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions.

Gambro develops, manufactures and supplies products and therapies for haemodialysis, CRRT, liver dialysis, myeloma kidney therapy, related water systems and other extracorporeal therapies for chronic and acute patients.

The Brussels-based regulator also examined the effects of the proposed transaction in the market for haemodialysis, another treatment method for kidney dialysis.

The EC said that in contrast to CRRT, haemodialysis is generally administered to patients suffering from a chronic kidney condition and both companies are not y close competitors in this segment and will continue to face significant competition from other competitors, notably Germany's Fresenius Medical Care.