FTC approves Fresenius’s $2bn acquisition of NxStage Medical

The US Federal Trade Commission (FTC) has issued a  final approval of Fresenius Medical Care’s $2 billion acquisition of medical device company NxStage Medical.

Yesterday, April 9, the FTC voted 3-2 to approve the final order, settling charges that the acquisition would be anti-competitive.

Germany-based Fresenius  announced its plan to acquire Boston-based NxStage, which develops and sells medical devices for use in home dialysis and in the critical care setting, in August 2017.

But the FTC  submitted a complaint (which became public in February 2019) alleging that the proposed merger would harm competition in the US market for bloodline tubing sets that are compatible with in-clinic hemodialysis machines that treat chronic renal failure.

Bloodline tubing sets are single-use plastic tube sets used during hemodialysis treatments.

Under the proposed settlement, the FTC required the divestiture of all rights and assets to NxStage’s bloodline tubing set business to B Braun Medical, a German medical and pharmaceutical device company.

Fresenius and NxStage are two of only three significant suppliers of bloodline tubing sets used in open architecture hemodialysis machines in the US. The pair control 82% of the market for bloodlines.

The merged company has been ordered to supply B Braun with bloodline tubing sets for a limited time, while it establishes its own manufacturing capability.

Fresenius  completed its acquisition of NxStage in late February, after the FTC announced the proposed settlement.

Rice Powell, CEO of Fresenius, said: “By combining NxStage’s capabilities with our broad product and service offering, we can help patients to live even more independently. In addition to broadening our product portfolio, this acquisition positions Fresenius to benefit from the growing trend toward home-based therapies.”

The parties will have to unwind the sale of rights and then divest the products to an FTC-approved buyer or buyers within six months of when the order becomes final if the FCT determines the manner of the divestiture is not acceptable or that B Braun is not an acceptable buyer.

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