Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: FTC requires divestitures in orthopedic device companies’ merger, (Sep 30, 2015)
Organizations Mentioned:Integra Lifesciences Corp. | Tornier N.V. | Wright Medical Group, Inc.
By Linda O’Brien, J.D., LL.M.
Wright Medical Group, Inc. and Tornier N.V. have agreed to sell Tornier’s U.S. rights and assets related to its total ankle replacements and total silastic toe joint replacements to resolve FTC charges that the proposed $3.3 billion merger would illegally reduce competition for these devices, the FTC announced today.
Headquartered in Memphis, Tennessee, Wright is a global orthopedic device company. Tornier, based in Amsterdam, the Netherlands, also operates globally, developing and marketing orthopedic products for use in the upper and lower extremity joints, sports medicine, and biologics.
According to the FTC’s complaint, (In re Matter of Wright Medical Group, Inc., File No. 151-0018), the merger of Wright and Tornier as proposed would violate federal antitrust laws by substantially lessening competition or to tend to create a monopoly in the U.S. markets for total ankle replacements and total silastic toe joint replacements. Wright and Tornier are close competitors and significant suppliers of these orthopedic devices in the United States. A combined Wright-Tornier would be able to unilaterally exercise market power, research and development would be reduced, and customers would be forced to pay higher prices.
Under the proposed settlement, Wright and Tornier will divest the rights and assets to these devices to Integra Lifesciences Corporation and provide Integra with intellectual property, manufacturing technology, and existing inventory, as well as other assets and assistance to ensure that Integra can effectively compete in the markets.
The proposed order also requires Wright and Tornier to supply Integra with total ankle replacements for up to three years and total silastic toe joint replacements for up to a year, while Integra transitions to become an independent competitor in these markets.
The FTC will publish the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment through October 30. Interested parties can submit written comments electronically or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice.
Companies: Wright Medical Group, Inc.; Tornier N.V.
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