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FTC Scrutiny Chills Medtech M&A Market

A challenging antitrust regulatory environment is cited as the biggest factor weighing on medtech M&A this year.

Amanda Pedersen

July 5, 2023

2 Min Read
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Image credit: Moor Studio / iStock via Getty Images

Medtech M&A has been a bit sluggish this year, and the Federal Trade Commission could be to blame.

In a recent analyst report, Neehdam & Co.'s Mike Matson noted that both the number of medtech M&A deals and dollar volume of deals is likely to decrease again in 2023.

"We think that a challenging antitrust regulatory environment is the biggest factor weighing on M&A," Matson wrote in the June 30 report, which also cites high interest rates and continued economic uncertainty as factors behind the trend.

According to Matson's report, there have been 173 merger and acquisition deals so far this year totaling $13.6 billion. If this pace continues, the analyst estimates there would be 353 medtech M&A deals totaling $27.7 billion in 2023. This would compare to 422 deals totaling $67.2 billion in 2022, which includes contribution from special purpose acquisition company (SPAC) deals.

The analyst noted that the Federal Trade Commission has challenged several high-profile deals.

In May, for example, Boston Scientific scrapped its plan to buy a majority stake in M.I. Tech, a Korean surgical tools company, for $230 million. Instead, the company now aims to buy a minority stake in M.I. Tech of around 10%. Boston Scientific citied an inability to obtain required global regulatory approvals in some countries. Holly Vedova, director of FTC's bureau of competition, seemed almost gleeful in a prepared statement issued May 24.

“I am pleased that Boston Scientific and M.I. Tech have abandoned their proposed transaction in response to investigations by FTC staff and our overseas enforcement partners," Vedova said. "The FTC will not hesitate to take action in enforcing the antitrust laws to protect patients and doctors. I would like to thank the entire FTC team for their excellent work on this matter.”

Looking back over the past decade of medtech M&A, Matson highlighted the seven largest deals since 2002 that fall into FactSet's medical specialties sector: Medtronic's $46.2 billion acquisition of Covidien announced in 2014; Blackstone, Carlyle and Hellman & Friedman's $30 billion purchase of Medline announced in 2021; Abbott's $25 billion acquisition of St. Jude Medical announced in 2016; Boston Scientific's $27 billion Guidant acquisition announced in 2005; BD's $24 billion acquisition of C.R. Bard announced in 2017; Siemens Healthineers' $16 billion acquisition of Varian Medical Systems announced in 2020; and Thermo Fisher's $13.6 billion (plus assumption of debt) acquisition of Life Technologies, announced in 2013.

 

About the Author(s)

Amanda Pedersen

Amanda Pedersen is a veteran journalist and award-winning columnist with a passion for helping medical device professionals connect the dots between the medtech news of the day and the bigger picture. She has been covering the medtech industry since 2006.

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