Report: US regulators poised to clear Abbott’s $25B St. Jude buy

Regulators in the U.S. are positioned to approve Abbott‘s (NYSE:ABT) $25 billion acquisition of St. Jude Medical (NYSE:STJ), according to 2 Reuters sources.

The approval from the U.S. Federal Trade Commission could come through as early as this week or the next, according to the Reuters report.

The companies were unsure of the conditions necessary for FTC clearance, according to the report, but the companies arranged to sell off certain medical assets to Terumo (TYO:4543) for approximately $1 billion as they sought to overcome the regulatory hurdles.

Earlier this month, anti-trust regulators in India joined their counterparts in the European Union in granting conditional approval for the $25 billion tie-up.

In a Dec. 16 Twitter message, the Competition Committee of India said it “approves proposed combination between St Jude Medical and Abbott Laboratories; subject to voluntary remedies.”

Although the exact “voluntary remedies” required by CCI weren’t made clear, last month the European Commission’s decision on the deal required the divestiture of a pair of device lines: St. Jude must deal its Angio-Seal and Femoseal vascular closure assets, including a manufacturing plant in Puerto Rico, and Abbott must deal the Vado steerable sheath it bought with the acquisition of Kalila Medical earlier this year. Both assetts are slated to go to Terumo in their $1 billion deal.

Abbott has said it plans to pay for the deal with cash on hand and a $15.1 billion debt offering. The Abbott Park, Ill.-based healthcare giant floated $2.85 billion in 2.35% senior notes due in 2019; $2.85 billion in 2.9% notes due 2021; $1.5 billion in 3.4% notes due 2023; $3.0 billion in 3.75% notes due 2026; $1.65 billion in 4.75% notes due 2036; and $3.25 billion in 4.9% notes due 2046.

If the deal doesn’t go through by the end of next year, Abbott would have to redeem the 2019, 2023, 2026, 2036 and 2046 notes, but not the 2021 notes at a 101% premium plus interest, according to a regulatory filing.

Material from Reuters was used in this report.

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