Britain’s competition watchdog was due to deliver its final assessment early this week on Cochlear’s acquisition of Oticon Medical, and the deal was shaping up to get the red light.
But analysts believe that even if the UK’s Competition and Markets Authority does block an acquisition for Cochlear, it would not have a major impact on the medical device company’s earnings future.
Apparently, the opportunity was brought to Cochlear by Oticon Medical’s parent company Demant, rather than Cochlear itself seeking out the business, and the proposed deal took the loss-making business off Demant’s hands.
At the time, Cochlear said it would offer greater scale and more research and development and market growth opportunities.
A likely scenario is that the transaction would be recut.
Cochlear, which makes electronic devices that improve hearing, told the market on April 20 that the CMA had provisionally found that the proposed acquisition of Oticon Medical may result in substantial lessening of competition in the supply of bond conduction solutions in the UK.
It said competition was critical to driving innovation and that the proposed acquisition could potentially lead to recipients who need hearing implants losing out, with less choice, reduced quality, or higher prices. At that time, it said the CMA would invite comment on its provisional findings and potential remedies and the inquiry group had stated that its findings may alter in response to comments received.
CMA’s final report was due by Monday.
Cochlear agreed to buy Oticon Medical in June last year for $176m.
The deal has also been under scrutiny from the Australian Competition and Consumer Commission.
Oticon Medical is described as a global leader in implantable hearing solutions with 75,000 hearing implant recipients, which includes cochlear and acoustic implants.
It was expected to add $75m-$80m to Cochlear’s annual revenue.
Elsewhere, MST Marquee partner and senior analyst Mark Samter is leaving equities research and will take on a job at hedge fund Millennium.
The fund, with $US58bn ($88bn) of assets under its control, invests in global energy stocks.
Mr Samter joined MST Marquee from Credit Suisse in 2018 and has covered the top names in the energy sector such as Origin Energy, AGL Energy, Woodside and Santos.
Before joining Credit Suisse in 2013, Mr Samter worked at CIMB.
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