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As of this entry, the FTC has still not granted consent to Datascope Corp. (DSCP) divestiture agreement announced in late November of last year.

Despite the fact that some regulatory interest was anticipated in this deal, the current delay is highly unusual, and somewhat perplexing, as concessions such as those offered by DSCP are routinely accepted without much delay by the current FTC. While it can be speculated that the holiday period may be partially to blame for the continued HSR review, it seems that more than six weeks would be ample time for the FTC to fully assess the impact of the divestiture agreement. Obviously, this has not occurred.

Although this publication remains very confident that the FTC will clear this transaction without much further delay, it must be pointed out that there is a chance that DSCP's divestiture plan failed to address the primary competition issue which was believed to center on specific types of vascular grafts (such as peripheral vascular grafts), which in turn was believed to be included in the broad "endoscopic vessel harvesting" unit being offered for divestiture. At this time there is no reason or evidence to suggest that the unit in question does not alleviate any/all vascular graft competition issue, but the continued FTC review certainly suggests that this is possible.

In short, Getinge will very likely need to extend the current tender offer at least another ten days and perhaps deeper into January in order to allow the FTC to complete its review. Again, FTC clearance continues to be anticipated without extraordinary delays, regardless of the current situation.

Disclosure: no positions

Source: Datascope / Getinge AB: Awaiting FTC Clearance