|Baxter CEO Robert Parkinson|
Baxter ($BAX) has won over Chinese regulators with its proposed $4 billion deal for Gambro, completing the latest stop in a world tour to become a global leader in kidney dialysis.
China had just two conditions to approve Baxter's deal, Reuters reports: First, the company has to sell off its continuous renal replacement therapy segment, and then it has until March 2016 to get out of a China-based outsourcing deal with Japan's Nipro.
Baxter already promised the EU it would ditch the renal replacement business in exchange for a conditional deal approval last month, and the company will have to do without a segment that includes devices to treat acute kidney failure and accounts for about 2% of total kidney sales.
With the penciled-in blessings from the EU and China, Baxter is a bit closer to leapfrogging current dialysis market leader Fresenius Medical ($FMS) and, assuming it doesn't have to shed too many units in the process, taking the top spot in the renal market.
Baxter is already well-situated in dialysis, last quarter raking in $654 million from its renal devices, a 3% jump over the previous year. But adding in Gambro and its strong foothold in Latin America and Asia would make Baxter an unquestioned leader, CEO Robert Parkinson has said, folding in the Swedish company's $1.6 billion and solid position in hemodialysis.
Without Gambro, Baxter projected up to 3% annual revenue growth, but, provided the deal gets done on schedule, Baxter expects to grow as much as 8% on the year, good for about $15.3 billion for 2013.
Upon signing the deal in December, Baxter figured it would close its Gambro buyout in the first half of 2013, but regulatory delays have pushed the expected wrap-up back a quarter. Baxter is still piecing together the cash it needs to get the deal done, in June announcing plans to raise $3.5 billion by selling senior notes.
- read the Reuters story