Stryker will sell total ankle replacement and finger joint implant assets to DJO Global.
The Federal Trade Commission will require medical device companies Stryker Corp. and Wright Medical Group N.V. to divest all assets related to Stryker’s total ankle replacements and finger joint implant products to remedy concerns that Stryker’s proposed $4 billion acquisition of Wright will harm competition in those markets.
Under the terms of the consent agreement, the companies will divest Stryker’s total ankle replacements and finger joint implants businesses to DJO Global Inc.
The FTC’s complaint alleges that the acquisition as proposed would likely result in substantial competitive harm to consumers in the U.S. markets for total ankle replacements and finger joint implants. As suppliers of close substitutes in both markets, Michigan-based Stryker and Dutch company Wright respond to competition from each other with improved products, better service, and lower prices. By eliminating this direct and substantial head-to-head competition, the proposed acquisition likely would allow the combined firm to exercise market power unilaterally, resulting in less innovation and higher prices for consumers, according to the complaint.
Total ankle replacements are used to treat end-stage ankle arthritis, reducing pain while maintaining or increasing ankle motion. According to the complaint, Wright and Stryker are the largest and the third-largest suppliers of total ankle replacements in the United States. Without a remedy, the merged company would control approximately 75 percent of the U.S. market for total ankle replacements.
Finger joint implants are used to treat advanced osteoarthritis in the hand, after other, less invasive options have failed. According to the complaint, Wright and Stryker are two of only three significant suppliers for finger joint implants in the United States. Without a remedy, the combined company would control more than half of the U.S. market for finger joint implants.
By ODT | Orthopedic Design & Technology
Image Credit: ODT