Arrow International/Teleflex: Anti-Trust Issues in the Catheter Niche?

There appears to be a single overlaps associated with the Arrow International Inc. (ARRO) - Teleflex Inc. (TFX) merger: catheters. Both companies offer various catheter products, with ARRO being the more diverse and specialized manufacturer/distributor of these products. TFX's catheters are limited to its urology products line.

Although recent and/or reliable market share data has not been located for specific catheter niches, there does appear to be ample competition in the industry at this time. Bard, Johnson Johnson, Boston Scientific, and others all offer various catheter products and certainly have the ability to enter virtually any catheter niche.

As it stands at this early stage of the research, ARRO is primarily involved in coronary catheter applications, while TFX's catheters appear to be, again, limited to urology applications. This should be the difference which facilitates a quick HSR approval.

With respect to the SEC, ARRO amended its 2006 annual report once, and had a single late 10-Q filing for the first quarter of 2005. Other than those two encounters, ARRO has had very little activity with the regulator over the last five years. Given the all-cash nature of the deal and the SEC's well-established rapid pace for merger proxies at this time, there is virtually no chance that the proxy review for this deal will exceed 45 days.

Assuming the first proxy statement is filed in mid/late-August, the companies should have little difficulty completing the transaction before the end of October 2007.

Disclosure: We have no positions of any kind, in any security. We are a completely neutral source of research and analysis.