NxStage/Fresenius: FTC explores two-to-one merger risk in home segment – third party

18 December 2017 - 12:00 am UTC

Antitrust enforcers reviewing NxStage Medical [NASDAQ:NXTM] and Fresenius Medical Care’s (FMC) [NYSE:FMS] proposed deal seem particularly focused on a merger to monopoly risk in the home dialysis market, said a third party source recently contacted by the agency.
That idea was backed up by an industry executive who has not been contacted by enforcers but who is in touch with patients groups. “Our biggest concern would be if Fresenius took NxStage out of the picture after buying it,” the executive said. Most patients undergoing home hemodialysis (HD) are using NxStage machines, he said. FMC’s emphasis has always focused on in-clinic therapy, he added.
The Federal Trade Commission (FTC) is actively conducting in-depth interviews with third parties, vendors and rivals trying to gauge the impact of the deal on home HD patients whose choices are currently limited to NxStage or FMC, the third party said.
In August FMC, a vertically integrated provider of kidney dialysis products and services, announced plans to acquire Massachusetts-based NxStage, a developer of HD machines, in a USD 2bn tie-up. The Federal Trade Commission (FTC) issued a second request for more information in mid-October.
The companies believe they are having “constructive” and “professional” discussions with antitrust enforcers regarding their proposed merger, said a source familiar with the situation. The source said theories on vertical foreclosure risk “make no sense.”
FMC and NxStage did not respond to requests for comment. The FTC declined to comment.
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