|Baxter CEO Robert Parkinson|
Baxter ($BAX) is well on its way to the top spot in the kidney dialysis market, getting a green light from the European Commission on its planned $4 billion acquisition of competitor Gambro.
The EU's antitrust authority ruled that Baxter can proceed with its buyout provided it sells off its renal replacement therapy segment, which includes devices to treat acute kidney failure, Reuters reports.
Baxter said in an email Tuesday that the conditional approval is just one aspect of its ongoing efforts to close the Gambro acquisition this quarter. And while the company isn't providing any specifics on a future sale of any business units, a spokeswoman wrote that "Baxter remains committed to offering and advancing acute renal replacement therapy, and it will be part of the future integrated portfolio that will result from the acquisition of Gambro."
No matter what Baxter ends up keeping, a divestiture would assuage the EU's monopoly worries and clear the way for the company to buy out the world's third-largest dialysis maker, vaunting it ahead of current market leader Fresenius Medical ($FMS).
Baxter is still piecing together the cash it needs to get the deal done, last month announcing plans to raise $3.5 billion by selling senior notes between three and 30 years in length.
The company is already well-situated in dialysis, last quarter raking in $654 million from its renal devices, a 3% jump over the previous year. But integrating 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.
Meanwhile, Fresenius is struggling to keep pace, especially in the U.S., as personnel costs and currency problems dragged profits down 39% to $225 million last quarter.
- read the Reuters story
Editor's note: This story has been updated to include comments from Baxter.