U.S. antitrust regulators on Wednesday approved a pair of major deals in the medical field, including Medtronic's (NYSE:MDT) purchase of Covidien, which will allow it to take advantage of tax breaks in Ireland.
The Federal Trade Commission said it would allow medical technology company Medtronic Inc's $42.9 billion deal to buy Dublin-based Covidien Plc on condition that it sell its drug-coated balloon catheter business.
The commission also approved two parts of a three-way deal between GlaxoSmithKline Plc and Novartis AG, which reflects an industry trend in which companies focus on their strongest businesses.
The transaction, announced in April, calls for Britain's GSK to buy most of the vaccines business of Novartis, the Swiss company to purchase GSK's cancer drugs, and the two groups to team up in consumer healthcare.
The FTC approved the vaccines portion of the deal and the consumer healthcare part on the condition that Novartis sell its Habitrol nicotine patch, the companies said on Wednesday.
Novartis and GSK, which has Nicoderm CQ, are two of only three companies that sell nicotine patches to U.S. retailers, the FTC said.
The FTC's approval of the Covidien deal takes Minnesota-based Medtronic a step closer to moving to Ireland, where it could have access to revenues earned outside the United States without paying U.S. taxes on them.
The merger, which was announced in June, will create a company close in size to the medical device business of industry leader Johnson & Johnson.
The European Union and China must still approve the deal, while Canada approved it on Wednesday, Medtronic said.
Medtronic, which makes defibrillators, spinal implants, insulin pumps and other products, said previously that it expected the deal to close in early 2015.
Medtronic is the world's largest stand-alone medical device maker, with a market value of more than $60 billion, while Covidien's products are used in a range of surgical procedures.
Colorado-based Spectranetics Corp will purchase Covidien's drug-coated catheter business, the FTC said.
(Reporting by Diane Bartz; Editing by Chizu Nomiyama and Lisa Von Ahn)