There were conditions attached to the approval, though.

Nancy Crotti

The European Commission has approved the $25 billion merger of Abbott Labs and St. Jude Medical, contingent on Abbott selling two cardiovascular devices.

Abbott and St. Jude compete on vessel closure devices and devices used in electrophysiology procedures, in particular transseptal introducer sheaths. A combined company's ownership of these devices could have led to price rises, given the insufficient competitive pressure from the remaining players on the market, the commission said in a statement.

Abbott and St. Jude last month agreed to sell their vascular closure portfolio and other assets to Japanese multinational Terumofor $1.12 billion. The sale includes St. Jude's Angio-Seal and FemoSeal vascular closure products, as well as Abbott's Vado Steerable Sheath, developed to compete with St. Jude's market-leading devices.

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The Angio-Seal offers healthcare providers an alternative to sealing catheterization puncture sites through manual compression. Transseptal sheaths are used for introducing and removing catheters. The European commissioners were concerned that Abbott would kill off its Vado line post-merger, resulting in fewer product choices for doctors and patients due to lowered competition.

Abbott also offered to divest St. Jude's vascular closure device manufacturing facilities in Puerto Rico, and to sell off Kalila Medical (Campbell, CA), which developed Vado. Abbott announcedin February that it would acquire Kalila, but the commission's statement said Abbott did not integrate the smaller company into its operations.

The Kalila announcement came one day after Abbott announcedit would purchase Alere for $6 billion. The latter combination has been fraught with problems, most recently a lawsuitby Abbott claiming breach of contract.

The divestitures promised by Abbott and St. Jude satisfied the commission's concerns about competition, although itsdecision is conditional upon full compliance with the commitments.

The commission also said it worked with the U.S. Federal Trade Commission on the competition issues.

"When it comes to the interests of patients and healthcare systems, we have to make sure that prices stay competitive, that practitioners have sufficient choice and that promising innovative products are not abandoned by the merging companies," said commissioner Margrethe Vestager, who oversees competition policy. "I am glad we have found a solution that allows this takeover to proceed, while ensuring that competition is preserved."

"Abbott's acquisition of St. Jude Medical remains on-track," added Abbott spokeswoman Elissa Maurer. "We continue to expect the transaction to close by year-end."

Nancy Crotti is a contributor to Qmed.

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