WASHINGTON (Reuters) - Healthcare company Abbott Laboratories (ABT.N) has won U.S. antitrust approval for its proposed $25 billion acquisition of medical device maker St. Jude Medical Inc STJ.N, the U.S. Federal Trade Commission said on Tuesday.

Abbott agreed to divest two medical devices used in cardiovascular procedures to resolve FTC concerns the acquisition would stifle competition, the commission said in a statement.

“We continue to work to obtain final regulatory approvals and anticipate closing before the end of the year or shortly thereafter,” Abbott spokeswoman Elissa Maurer said in an email.

The company will sell St. Jude’s vascular closure device and Abbott’s steerable sheath to Japan-based Terumo Corp (4543.T). In October, Abbott said the companies would sell some of their medical device businesses to Terumo for about $1.12 billion as a step toward completing the deal.

Vascular closure devices are used to seal small holes made in an artery to prevent bleeding following a coronary angiogram, a special x-ray to see if coronary arteries are blocked or narrowed. Steerable sheaths are used to help place catheters into the heart.

European antitrust enforcers agreed to the deal in November provided the companies divest the two devices. Representatives for Abbott and St. Jude were not immediately available for comment.

Abbott has said the deal will help it compete against larger rivals Medtronic Plc (MDT.N) and Boston Scientific Corp (BSX.N) as hospitals look to cut the number of their suppliers.

St. Jude has been under pressure after short-seller Muddy Waters and research firm MedSec Holdings said in August that its heart devices were riddled with defects that make them vulnerable to cyber hacks. St. Jude has denied the allegations and sued both firms.

In October, St. Jude said it had told doctors to stop implants of its Nanostim leadless cardiac pacemaker, citing reports of problems with electronic data reporting caused by a battery malfunction that could put patients at risk.

There have been no reports that any patient injuries resulted from the malfunction, St. Jude has said.

Traders gather at the booth that trades Abbott Laboratories on the floor of the New York Stock Exchange, December 10, 2012. REUTERS/Brendan McDermid

Abbott has been divesting businesses to focus on its cardiovascular devices and diagnostics business, selling its medical optics division to Johnson & Johnson (JNJ.N) for $4.3 billion earlier this year. It spun off its pharmaceuticals business as AbbVie Inc (ABBV.N) in 2013.

Abbott is trying to pull out of a second deal, the $5.8 billion acquisition of diagnostic test maker Alere Inc ALR.N, which had failed to file financial statements and disclosed probes into billing and foreign sales practices.

The two companies are suing each other.</s>Dec 27 Healthcare company Abbott Laboratories has won U.S. antitrust approval for its proposed purchase of medical device maker St. Jude Medical Inc , the Federal Trade Commission said on Tuesday. Abbott has agreed to divest two medical device businesses to settle FTC charges that the $25 billion acquisition of St. Jude would likely be anticompetitive, the FTC said in a statement.

Start the conversation, or Read more at Reuters.</s>WASHINGTON: Healthcare company Abbott Laboratories has won U.S. antitrust approval for its proposed purchase of medical device maker St. Jude Medical Inc , the Federal Trade Commission said on Tuesday.

Abbott has agreed to divest two medical device businesses to settle FTC charges that the US$25 billion acquisition of St. Jude would likely be anticompetitive, the FTC said in a statement.

Abbott has said the deal would help it compete against larger rivals Medtronic Plc and Boston Scientific Corp as hospitals look to cut the number of their suppliers.</s>WASHINGTON (Reuters) - Healthcare company Abbott Laboratories <ABT.N> has won U.S. antitrust approval for its proposed purchase of medical device maker St. Jude Medical Inc <STJ.N>, the U.S. Federal Trade Commission said on Tuesday.

Abbott has agreed to divest two medical device businesses to settle FTC charges that the $25 billion acquisition of St. Jude would likely be anticompetitive, the FTC said in a statement.

Abbott has said the deal would help it compete against larger rivals Medtronic Plc <MDT.N> and Boston Scientific Corp <BSX.N> as hospitals look to cut the number of their suppliers.

The FTC said the parties are required to sell businesses for two devices used in cardiovascular treatments - St. Jude’s vascular closure device and Abbott's steerable sheath - to Japan-based Terumo Corp <4543.T>.

Representatives for Abbott and St. Jude were not immediately available for comment.

Abbott said in October that the companies would sell some of their medical device business to Terumo for about $1.12 billion as a step toward completing the deal.

European antitrust enforcers approved the merger in November if the companies divest the two devices used in cardiovascular treatments.

St. Jude has been under pressure after short-seller Muddy Waters and research firm MedSec Holdings said in August that its heart devices were riddled with defects that make them vulnerable to cyber hacks. St. Jude has denied the allegations and sued both firms.

In October, St. Jude said it had told doctors to stop implants of its Nanostim leadless cardiac pacemaker, citing reports of problems with electronic data reporting caused by a battery malfunction that could put patients at risk.

There have been no reports that any patient injuries resulted from the malfunction, St. Jude has said.

Abbott has been divesting businesses to focus on its cardiovascular devices and diagnostics business, selling its medical optics division to Johnson & Johnson <JNJ.N> for $4.3 billion earlier this year. It spun off its pharmaceuticals business as AbbVie Inc <ABBV.N> in 2013.

Abbott is trying to pull out of a second deal, the $5.8 billion acquisition of diagnostic test maker Alere Inc <ALR.N>, which had failed to file financial statements and disclosed probes into billing and foreign sales practices.

The two companies are suing each other.</s>The Federal Trade Commission (FTC) has given its approval to Abbott Laboratories’ (NYSE: ) deal to acquire St. Jude Medical, Inc. (NYSE: ).

The FTC has certain conditions that Abbott Laboratories must fulfill to complete its acquisition of St. Jude Medical, Inc. One of these conditions is that it divests rights and assets for certain devices to Tokyo-based Terumo Corporation.

The rights and assets that it must divests are for vascular closure devices and steerable sheaths. St. Jude Medical, Inc. is the owner of the vascular closure devices and Abbott Laboratories owns the steerable sheaths. The companies must also help Terumo Corporation establish manufacturing for the devices. This condition was put in place to keep ABT from monopolizing the market for these devices.

There’s also another condition that the FTC has for Abbott Laboratories’ acquisition of St. Jude Medical, Inc. This is that it must inform the organization if it plans to purchase lesion-assessing ablation catheter assets from Advanced Cardiac Therapeutics.

Advanced Cardiac Therapeutics and St. Jude Medical, Inc. currently cover the market for lesion-assessing ablation catheters in the United States. This means that if Abbott Laboratories seeks to buy the lesion-assessing ablation catheters assets from Advanced Cardiac Therapeutics, it would corner the market for them in America.

There is also still a 30-day period of time before the FTC decides if it will give the final consent order for the acquisition to Abbott Laboratories. During this time, the organization will be accepting public comments. This will have the final decision taking place on Jan. 26, 2017.
• The 10 Best Fidelity Funds for 2017
• 3 Stocks That Could Get Pounded by Tax Loss Selling</s>Federal regulators greenlighted Abbott Laboratories' purchase of St. Jude Medical on Tuesday after the companies agreed to divest two medical device businesses.

Abbott, based in north suburban Abbott Park, will sell the product lines to Tokyo-based Terumo Corp. to settle Federal Trade Commission charges that the acquisition would harm competition.

Abbott will divest its steerable sheaths, which are used to guide catheters for treating irregular heartbeats. Minnesota-based St. Jude will divest its vascular closure devices, which are used to seal punctures from procedures involving catheters.

St. Jude has had a near-monopoly on steerable sheaths for more than a decade, and Abbott recently entered the market, according to an FTC news release. The merger would have eliminated any competition for the products, and given the combined companies more than 70 percent of the market for the vascular closure devices.

"We continue to work to obtain final regulatory approvals and anticipate closing before the end of the year or shortly thereafter," Abbott spokeswoman Elissa Maurer said in a statement.

The FTC also said Abbott must notify the federal agency if it plans to acquire assets for a device that provides feedback to physicians on the force catheters apply. Only St. Jude and one other company make those devices — called lesion-assessing ablation catheters — in the U.S.

Abbott has a partnership with Advanced Cardiac Therapeutics to develop the catheters, so if it acquired the assets from that company after the acquisition, it would eliminate competition.

The agreement will be subject to public comment for 30 days, then the commission will vote again on whether to make the agreement final.

Abbott's stock was up almost half a percent to $38.60 at market close Tuesday. St. Jude's stock was up 0.4 percent to $80.15.</s>NORTH CHICAGO (dpa-AFX) - The U.S. Federal Trade Commission put conditions on Abbott Laboratories' (ABT) proposed $25 billion acquisition of rival medical device maker St. Jude Medical Inc. (STJ).



Abbott Laboratories has agreed to divest two medical device businesses to settle FTC charges that its proposed acquisition of St. Jude Medical Inc. would likely be anticompetitive.



The FTC's complaint alleges that without a remedy, the proposed acquisition would harm competition in the U.S. markets for vascular closure devices, which are used to close holes in arteries from the insertion of catheters, and for 'steerable' sheaths, which are used to guide catheters for treating heart arrhythmias.



The proposed consent order requires the parties to divest to Tokyo-based medical device maker Terumo Corporation all rights and assets related to St. Jude's vascular closure device business and Abbott's steerable sheath business. Terumo does not currently sell any vascular closure devices or steerable sheaths but has sold related products and medical devices in the U.S. market for more than 30 years, and possesses the industry experience and reputation necessary to replace competition, according to the FTC. The order requires both companies to assist Terumo with establishing its manufacturing capabilities.



Under the proposed order, Abbott is also required to notify the FTC if it intends to acquire lesion-assessing ablation catheter assets from Advanced Cardiac Therapeutics, known as ACT. Lesion-assessing ablation catheters provide feedback to physicians regarding the force being applied by the catheter or the temperature of the ablation target.



Currently, only St. Jude and one other company provide lesion-assessing ablation catheters in the United States. Abbott and ACT have formed a partnership to develop these catheters. After the acquisition of St. Jude, if Abbott acquired lesion-assessing ablation catheter assets from ACT, it could eliminate additional competition that would result from an independent ACT.



Copyright RTT News/dpa-AFX</s>Abbott and St. Jude Medical, a maker of medical devices, agreed in October sell two product lines to win approval from the Federal Trade Commission. The companies will sell the product lines to Terumo Corp. for about $1.12 billion.

Abbott, based in North Chicago, and St. Jude Medical, based in St. Paul, Minnesota, announced their $25 billion acquisition on April 28.

The combination is expected to create a leading maker of medical devices in high-growth areas of the cardiovascular market.

St. Jude Medical is strong in the areas of heart failure devices, atrial fibrillation and cardiac rhythm management. Abbott is a leader in coronary intervention and transcatheter mitral repair.

“Bringing together these two great companies will create a premier medical device business and immediately advance Abbott’s strategic and competitive position,” Abbott chairman and CEO Miles D. White said in April. “The combined business will have a powerful pipeline ready to deliver next-generation medical technologies and offer improved efficiencies for health care systems around the world.”

Earlier this month, Abbott filed a lawsuit to end its buyout of troubled medical diagnostics maker Alere as that company dealt with the fallout of a key device recall and government investigations.</s>Washington, DC - U.S.-based global healthcare company Abbott Laboratories has agreed to divest two medical device businesses to settle FTC charges that its proposed $25 billion acquisition of St. Jude Medical, Inc. would likely be anticompetitive.

The FTC’s complaint alleges that without a remedy, the proposed acquisition would harm competition in the U.S. markets for vascular closure devices, which are used to close holes in arteries from the insertion of catheters, and for “steerable” sheaths, which are used to guide catheters for treating heart arrhythmias.

Without a remedy, the merger will cause significant harm to competition in these two markets. Specifically:
• The merged firm would control more than 70 percent of the market for vascular closure devices.
• St. Jude has held a near-monopoly in the market for steerable sheaths for more than a decade. Abbott recently entered the market, and the transaction would eliminate any competition between them.

The proposed consent order requires the parties to divest to Tokyo-based medical device maker Terumo Corporation all rights and assets related to St. Jude’s vascular closure device business and Abbott’s steerable sheath business. Terumo does not currently sell any vascular closure devices or steerable sheaths but has sold related products and medical devices in the U.S. market for more than 30 years, and possesses the industry experience and reputation necessary to replace competition, according to the FTC. The order requires both companies to assist Terumo with establishing its manufacturing capabilities.

Under the proposed order, Abbott is also required to notify the FTC if it intends to acquire lesion-assessing ablation catheter assets from Advanced Cardiac Therapeutics, known as ACT. Lesion-assessing ablation catheters provide feedback to physicians regarding the force being applied by the catheter or the temperature of the ablation target.

Currently, only St. Jude and one other company provide lesion-assessing ablation catheters in the United States. Abbott and ACT have formed a partnership to develop these catheters. After the acquisition of St. Jude, if Abbott acquired lesion-assessing ablation catheter assets from ACT, it could eliminate additional competition that would result from an independent ACT.

More information about this proposed merger and the FTC’s consent agreement can be found in the analysis to aid public comment.

Commission staff and the staff of antitrust agencies in Brazil, Canada, China, the European Union, Israel, Korea and South Africa worked cooperatively on this investigation, including with respect to the remedy and divestiture package, to ensure a consistent outcome.

The Commission vote to issue the complaint and accept the proposed consent order for public comment was 3-0. The FTC will publish the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through January 26, 2017, after which the Commission will decide whether to make the proposed consent order final. Comments can be filed electronically or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice.</s>Continued Abbott Laboratories (NYSE:ABT) insider purchases are a signal to outside investors that the company's shares currently are at a value-oriented price and that the company will be able to close its acquisition of St. Jude Medical Inc. (NYSE:STJ) soon. Further, we see such purchases as a signal to outside investors that ABT will be able to resolve its' ill-fated pending acquisition of Alere, Inc. (NYSE:ALR) at a mitigated cost to ABT. As readers may remember, earlier in 2016 investors sold off the company's shares given uncertainty and drama surrounding two of its major acquisitions. On a positive note, a U.S. regulator approval of ABT's acquisition of STJ is imminent (and follows European Union approval of the acquisition in late November 2016). ABT entered into an agreement to acquire SJM for $25 billion earlier in 2016 and ABT and STJ later agreed to sell certain products to Terumo Corporation in an all-cash transaction of about $1.12 billion to help close the STJ acquisition. ABT will benefit from its acquisition of STJ, which will bring to the company an industry leading pipeline of products relating to cardiovascular, neuromodulation, diabetes and vision care. While approval and closure of the acquisition of STJ is likely and beneficial to ABT, the company's pending acquisition of ALR is a more complex scenario that ABT has clearly wanted to back away from ever since ALR revealed information that make it a damaged acquisition target.

Early in December 2016, ABT filed a complaint in a Delaware court seeking to terminate its proposed merger with ALR because ABT believes that ALR "is no longer the company [ABT] agreed to buy when the parties signed their merger agreement in January [2016.]" ABT is attempting to back out of its $5.8 billion acquisition given that it believes that ALR acted deceptively during acquisition negotiations by withholding information about U.S. federal investigations. (Outside of the litigation between ABT and ALR, ALR was already under investigation by U.S. federal prosecutors in regard to its overseas sales practices under anti-bribery laws.) In its Complaint, ABT pointed out that: 1) an ALR subsidiary billed the U.S. government for services to hundreds of deceased persons over a five-year period, leading to the revocation of its Medicare enrollment; and 2) less than a month after the parties signed the merger agreement, ALR announced that it would be unable to file its 10-K in a timely manner due to an ongoing investigation of revenue recognition issues. In its Complaint, ABT set forth numerous additional problems plaguing ALR since each party entered the acquisition agreement. ALR, of course, believes ABT's lawsuit is entirely without merit by stating that "none of the issues ABT] has raised provides it with any grounds to avoid closing the merger" and that ALR has "complied with its contractual obligations under the merger agreement …." An important aspect of the litigation is that there is a clause in the acquisition agreement that states ABT need not close the merger if there has been any occurrence that has had or would reasonably be expected to have a "material adverse effect" on ALR's value.

Investors clearly believe that ABT is likely to be able to walk away from its pending acquisition of ALR with minimal damage to itself or its shareholders given that ALR's shares trade at about $40 a share, far below the $56 per share price that ABT agreed to pay ALR shareholders. As noted below, ABT insiders are also apparently positive about their company's ability to close its acquisition of STJ and to walk away from its pending acquisition of ALR with minimal adverse effects to itself. Although we cannot determine the outcome of the litigation between the parties, our belief is that ABT, the larger and more high-powered party to the acquisition, will likely be able to: 1) walk away from the acquisition with a payout to ALR; or 2) acquire ALR for a significantly lower purchase amount due to deceptive negotiating practices by ALR during acquisition talks. Regardless of the outcome of the ABT/ALR litigation, we believe that the multiple insider purchases of ABT shares by the company's executives speaks to their confidence in regard to ABT's: 1) stand alone prospects; 2) successful STJ integration prospects; and 3) ability to mitigate damages resulting from its disputed acquisition of ALR. We note further that the closure of the SJT acquisition will allow ABT to expand its heart device business and allow it compete against larger rivals Medtronic Plc (NYSE:MDT) and Boston Scientific Corp (NYSE:BSX).

Not only will the SJT acquisition allow ABT to drive revenue and earnings growth, but ABT's internal research and development will also allow it to drive revenue/profit growth. As ABT moves towards closing its acquisition of STJ and resolving its disputed acquisition of ALR, we should note that the company's third-quarter 2016 results were better than expected due to the strong performance of its established pharmaceuticals ("EPD") and medical devices divisions. Additional good news to support revenue growth going forward for the company is the U.S. FDA's approval of the company's Absorb product, the only fully dissolving heart stent, and Tecnis Symfony intraocular lenses for the treatment of cataracts. With this in mind, we note further that ABT has been positioning itself for improved revenue/profit growth over the long term through various divestitures and acquisitions. In recent years, ABT sold its slow-growth developed markets branded generics pharmaceuticals business to focus its higher-growth branded generics pharmaceutical business on emerging markets. The company also sold its medical optics business to Johnson & Johnson (NYSE:JNJ) to allow it to focus on obtaining leadership positions in cardiovascular devices and its expanding diagnostics business. In addition, ABT's newly approved innovative products are likely to drive revenue/earnings growth. The company currently yields about 2.75 percent, and has an extensive history of yearly dividend increases. Despite near-term STJ and ALR acquisition uncertainties, we believe the multiple insider purchases by ABT executives are a significant signal of confidence in the company's long-term prospects despite near-term adversities. We also believe that investors should consider the company's shares now as tax-loss selling will abate in 2017.

Multiple insiders continue to buy as acquisition uncertainties are likely to clear.

When we write about insider buying activity we typically note "one of the most positive signs to a potential investor in a company's stock is an insider purchase of its shares on the open market." We can expand on this notion further by stating that multiple insider purchases, especially close to 52-week lows, are an even more powerful signal to outsiders of such insiders' belief in actions being taken by a company to drive revenue/earnings growth over the intermediate and long term. In an earlier article on ABT we discussed insider CEO Miles White's multiple purchases of 369,950 shares at $40.35 to $40.45 in November 2016 for a total cost of about $15,000,000. In such article, we noted our belief in the significance of such multi-million dollar purchase closer to ABT's 52-week low given that Mr. White's position allows him to have the most knowledge about the direction ABT is taking with respect to current and future product offerings, the company's financials, restructuring activities and the outcomes of any acquisition uncertainties. Although we find Mr. White's insider purchases significant on their own, other insiders continued to purchase the company's shares into late December 2016.

Robert Ford, Executive Vice President of Medical Devices at ABT, purchased 12,775 shares at $39.07 on December 14, 2016 for a total cost of about $499,120. In addition, Brian Blaser, Executive Vice President of Diagnostic Products at ABT, purchased 15,580 shares at $38.43 on December 20, 2016 for a total cost of about $598,739. We find such continued insider purchases in addition to Mr. White's significant purchases continue to add to our confidence in continuing to invest in ABT's shares. While ABT faces multiple acquisition-related uncertainties, as noted above, such insider purchase activity indicates a positive resolution of any outstanding acquisition uncertainty in ABT's favor. In particular, we believe that such insiders likely believe that the U.S FTC allows ABT to acquire STJ soon. We also believe that such insiders also appreciate ABT's ability to integrate STJ successfully and drive revenue/earnings growth from such acquisition.

Each insider also has intimate knowledge as to whether ABT will complete the troubled ALR acquisition or not. Such insiders likely understand the worst-case outcome of the litigation involving the pending ALR acquisition and likely also have a clear idea whether ABT can walk about from the ALR acquisition and the ability of ABT to mitigate the cost to walk away from such acquisition. We see such multiple insider purchases as a sign of their confidence in the company despite its shares trading near a 52-week low. Each insider is signaling with their purchase that ABT shares are beginning to represent value at his purchase price while also offering an about 2.75 percent dividend yield. With ABT shares trading at about the insider's purchase price, potential investors with a long-term holding period currently have the opportunity to purchase this company's shares at a price similar to such insider purchases or lower on a continued market sell off.

We continue to believe that ABT is optimally positioned within the global healthcare markets, particularly in emerging markets. As noted above, the company sold its developed markets established pharmaceuticals unit, which was expected to experience slow growth. Much of ABT's effort to drive improved revenue and profit growth involves divestitures and acquisitions. ABT, by selling its slow-growth developed markets branded generics pharmaceuticals business, will allow it to focus on its higher-growth branded generics pharmaceutical business in emerging markets. As also noted above, the company aims to obtain leadership positions in cardiovascular devices and its expanding diagnostics business. Further, ABT's newly approved innovative products noted above in recent developments are also likely to drive revenue/earnings growth. Finally, ABT is in the midst of efforts to improve productivity and efficiency to enhance growth. With ABT's STJ closure about to be approved, the company is also likely to be able to walk away from its ALR acquisition given its strong litigation position that ALR committed certain actions that damaged its value to ABT.

ABT's forward price-to-earnings ratio is about 17.40 based on 2016 earnings estimates of $2.21, and about 15.90 based on 2017 earnings estimates of $2.42. We believe that, with overall markets at or near record highs, an investor could wait for ABT's share price to pull back to a range of about $36.30 to $38.75 to establish a full position. (A forward price-to-earnings ratio in the range of about to 15.00 to 16.00 based on fiscal year 2017 estimates). Given that ABT's share price is quite close to our buy range and is at about the price paid by ABT's multiple insiders, investors can feel secure purchasing the company's shares immediately. Although ABT is in transition, investors will benefit long term with share price appreciation, dividend increases and share buybacks as the uncertainty surrounding company's multiple acquisitions clears up.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
The U.S. Federal Trade Commission gives the antitrust go ahead to Abbott Laboratories in its acquisition of St. Jude Medical.