Zimmer Submits Revised Plan To EU Regulators For Biomet Bid
By Jof Enriquez,
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Zimmer Holdings recently disclosed that it had submitted to European regulators a revised proposal over its bid to acquire Biomet. The move pushes back the deadline for a mandatory review of the transaction. However, Zimmer is optimistic that the deal will close in the first quarter of 2015.
In a press release, Zimmer said that it recently "proposed a revised remedy package to the European Commission (EC) to facilitate "the body's review of the proposed Biomet merger. Details of the submission were not made available.
However, Zimmer said that the revised proposal is "generally consistent with the initial remedy package proposed in December 2014" and contains "certain modifications to address the EC's comments based on the results of its market test," according to the press release.
The initial proposal submitted by Zimmer last year contained plans to divest some assets in Europe, according to a Wall Street Journal article. Divesting assets could allay the EC's concerns that the merger would result to stunted innovation and higher market prices.
In June 2014, the EC had temporarily stopped its review of the transaction because the initial notification submitted by Zimmer was deemed incomplete, and scrapped the original deadline for submitting documents. The company said in its recent press release that the submission of the revised remedy package means that European regulators now have until May 26, 2015 to make a decision.
The company also confirmed that the merger with Biomet will need clearance from the Japan Fair Trade Commission, and will have to comply with provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Through that law, the U.S. Federal Trade Commission (FTC) last year also requested additional information from Zimmer regarding the transaction.
The size of the $13.4 billion Zimmer-Biomet merger has drawn anti-trust concerns. The deal is the the fifth-largest medical device industry transaction in the past decade. The new company that will be created by the two rivals would become the second-largest company in the $45 billion market for orthopedic and dental products, behind leader Johnson & Johnson.
Zimmer late last year announced the new leadership team for the combined company. David Dvorak, currently the president and CEO of Zimmer, will retain the top position. He will be assisted by 12 senior executives from both Zimmer and Biomet who will supervise three business units, three geographic regions, and six functional areas.