Competition Bureau Reaches Consent Agreement in Medtronic/Covidien Deal

OTTAWA, ONTARIO--(Marketwired - Nov. 26, 2014) - Competition Bureau

The Competition Bureau announced today that it has reached a consent agreement with Medtronic Inc. (Medtronic) and Covidien plc (Covidien) that resolves the Bureau's concerns related to Medtronic's proposed acquisition of Covidien. Both companies sell medical devices in Canada for the treatment of various conditions. The consent agreement filed with the Competition Tribunal today effectively resolves the Bureau's finding that Medtronic's acquisition of Covidien would likely result in a substantial prevention of competition in the supply of drug-coated balloons for the treatment of peripheral artery disease.

The agreement requires the sale of Covidien's drug-coated balloon catheter (DCB) business, together with a perpetual, non-exclusive license to certain intellectual property. DCBs offer an emerging, innovative treatment method to clear blocked arteries.

The DCB business will be sold to The Spectranetics Corporation (Spectranetics), within 10 days of completing the proposed transaction. While negotiating the consent agreement, Medtronic and Covidien sought potential purchasers for the DCB business, and proposed Spectranetics. Upon a careful review, the Bureau determined that Spectranetics was committed to carrying on the DCB business and had the managerial, operational and financial capability to effectively compete in Canada, thereby resolving the likely prevention of competition.

A monitor has been appointed to ensure the completion of the sale of the DCB business and the transfer of certain pending approvals required to bring the device to market in Canada, including patent applications.

Throughout the review, the Bureau worked closely with other jurisdictions including the United States Federal Trade Commission (U.S. FTC). As the assets being divested are primarily located in the United States, but serve both the U.S. and Canadian markets, the Bureau coordinated with the U.S. FTC to ensure an effective remedy in both jurisdictions.

Quick Facts

• Headquartered in Minneapolis (U.S.), Medtronic operates in more than 140 countries and employs 49,000 people.
• In Canada, Medtronic sells, services and distributes medical devices used in cardiovascular medicine, diabetes, spinal and neurosurgery, and ear, nose and throat surgery.
• With more than 38,000 employees, Covidien operates in over 150 countries.
• In Canada, Covidien distributes a range of medical devices and supplies products for the treatment of a range of diseases and disorders, including peripheral vascular and neurovascular diseases and disorders.
• Spectranetics develops, manufactures, markets and distributes single-use medical devices used in minimally invasive procedures within the cardiovascular system. The company's products are sold in over 65 countries and are used to treat arterial blockages in the heart and legs, and the removal of pacemaker and defibrillator leads.

Quotes

"This review is another example of how parties can work effectively to resolve the Bureau's concerns. I am satisfied that the sale of the drug-coated balloon catheter business to Spectranetics will ensure that competition is preserved in the sale of medical devices for the treatment of peripheral vascular diseases."

Related Information

Position Statement: Competition Bureau statement regarding the acquisition by Medtronic of Covidien

Associated Links

A copy of the consent agreement will be available shortly on the Competition Tribunal website.

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The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.