Antitrust Law Daily Boston Scientific Corp. acquisition of interventional medicine company BTG conditionally approved
Wednesday, August 7, 2019

Boston Scientific Corp. acquisition of interventional medicine company BTG conditionally approved

By Jeffrey May, J.D.

FTC requires divestiture of assets to Varian Medical Systems to preserve competition in U.S. market for drug eluting beads (DEBs). Agency alleges that merging firms are the two largest DEB suppliers in the U.S.

In order to proceed with its proposed $4.2 billion acquisition of medical equipment and pharmaceutical supplier BTG plc, medical device company Boston Scientific Corp. has agreed to divest certain assets to Varian Medical Systems under the terms of a proposed FTC consent order. The consent order would resolve concerns that the combination of Boston Scientific and BTG, the two largest suppliers of drug eluting beads (DEBs) in the United States, would harm consumers in the U.S. market for these microscopic beads used to treat certain liver cancers (In the Matter of Boston Scientific Corp., FTC Dkt. C-4684, File No. 191 0039).

In defining the market, the agency alleged that the only other participant in the U.S. DEB market is Merit Medical, which is substantially smaller than either BSC or BTG and that new market entrants were unlikely. According to the complaint, without the divestitures, the transaction would likely: (1) eliminate actual, direct, and substantial competition between BSC and BTG in the market for the provision of DEBs; (2) increase the ability of the merged entity to unilaterally raise prices for DEBs; and (3) reduce incentives to improve quality and innovation of DEBs.

To remedy the competition concerns, the proposed FTC consent order would require Boston Scientific to divest its DEB business and closely-related bland bead business to Varian. A sale of BSC’s DEB business without its bland business could undermine the divestiture’s effectiveness, according to the agency. BSC would be required to accomplish the divestitures no later than ten days after consummating the proposed acquisition.

The FTC announcement of its approval of the acquisition comes less than nine months after Boston Scientific disclosed the deal. At that time, the company said that the transaction would expand its peripheral interventions portfolio with minimally invasive treatments for cancers and vascular conditions.

In July, Varian acknowledged its planned purchase of Boston Scientific’s portfolio of drug-loadable microsphere and bland embolic bead products for treating arteriovenous malformations and hypervascular tumors. Varian said that the deal was conditioned on the closing of the proposed acquisition of BTG by Boston Scientific.

Attorneys: Jonathan Ripa for FTC. Michael B. Bernstein (Arnold & Porter Kaye Scholer LLP) for Boston Scientific Corp.

Companies: Boston Scientific Corp.; BTG plc; Varian Medical Systems

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