The US Justice Department (DOJ) is investigating whether acquisitions by Medtronic limited competition in ventilator manufacturing, according to people familiar with the matter, an antitrust probe that emerged from complaints about device shortages during the coronavirus pandemic.
Medtronic has received a civil subpoena from the DOJ formally requesting more information, the people said, reported The Wall Street Journal.
The probe is centered on two related acquisitions that date to 2012, when Covidien , a device maker that sold ventilators, bought Newport Medical Instruments, a small California-based manufacturer of ventilator systems, for US$108 million.
Newport secured a contract with the federal government in 2010 to develop and supply low-cost ventilators, but the project stalled after Covidien bought Newport, and the two sides eventually agreed to end the contract before any ventilators were delivered.
Nearly three years after Covidien bought Newport, Medtronic bought Covidien in a roughly US$50 billion deal, inheriting Newport in the process. Both deals received antitrust clearance from the US Federal Trade Commission (FTC).
“Medtronic is cooperating fully with DOJ’s review of the 2012 Covidien-Newport transaction,” Medtronic spokesman Ben Petok said, adding that the deal was appropriately assessed and approved by the FTC.
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