The Australian Competition and Consumer Commission has announced that it will not oppose the proposed acquisition of Gambro AB by Baxter International Inc. after accepting an undertaking from Baxter to sell part of its Renal Replacement Therapy business.

Baxter and Gambro are global suppliers of Renal Replacement Therapy (dialysis) products. Dialysis is an artificial process that performs the key functions of healthy kidneys after a patient suffers kidney deterioration or failure.

The ACCC identified competition concerns in the supply of Continuous Renal Replacement Therapy (CRRT) after consultation with a range of market participants, including hospitals, state health boards, clinicians and alternative suppliers. Baxter and Gambro are the largest two of three suppliers of CRRT products in Australia.

"The ACCC was concerned that the proposed acquisition could have led to higher prices for CRRT in hospitals in the absence of the proposed divestiture,” ACCC Chairman Rod Sims said.

As the acquisition involved a global transaction, it has been reviewed by several international competition agencies including the European Commission and the New Zealand Commerce Commission.  Baxter agreed to divest its global CRRT business to Nikkiso Co. Ltd in order to address competition concerns identified by the European Commission.

The parties have agreed to provide a court enforceable undertaking, which requires the global divestiture to occur in Australia. The undertaking also requires Baxter to sell the global divestiture business to an ACCC approved purchaser. The ACCC clearance includes approval in Australia of Nikkiso as the purchaser of the global divestiture business.

"The divestiture of Baxter’s CRRT business to Nikkiso is expected to create a viable, effective, independent and long term competitor to Baxter and thereby address the ACCC's competition concerns," Mr Sims said.

"The ACCC is satisfied, taking into account the enforceable undertaking provided by Baxter, that the proposed global acquisition is unlikely to substantially lessen competition in Australia," he said.

The ACCC will issue a public competition assessment in due course.