Legal Library: Cases and Proceedings

Two of the world’s largest auto parts suppliers, ZF Friedrichshafen AG and TRW Automotive Holdings Corp., agreed to divest TRW's linkage and suspension business in North America and Europe, to settle FTC charges that their proposed $12.4 billion merger would likely harm competition in the North American market for heavy vehicle tie rods. Under the consent agreement, the combined company is required to divest TRW’s North American and European linkage and suspension business for heavy and light vehicles (which includes heavy vehicle tie rods). The business includes five manufacturing plants in Michigan, Canada, the Czech Republic, and Germany, and leased space in a research and development lab in Germany. At the divestiture buyer’s request, ZF must provide transition services for logistical and administrative support as well as transitional supply agreements for key manufacturing inputs needed to fulfill existing customer contracts.

Medical device company Zimmer Holdings, Inc. agreed to divest U.S. rights and assets related to unicondylar knee implants, total elbow implants, and bone cement in order to settle FTC charges that its proposed $13.35 billion acquisition of Biomet Inc. is anticompetitive. According to the complaint, Zimmer and Biomet are two of the only three substantial competitors in the U.S. markets for unicondylar knee implants and total elbow implants, and two of only four significant competitors in the U.S. market for bone cement. The order requires Zimmer to divest to Smith & Nephew the U.S. intellectual property, manufacturing technology, and existing inventory relating to its unicondylar knee implant, and to provide transitional services to help them establish manufacturing capabilities and secure necessary FDA approvals. The order also requires Biomet to divest to DJO the U.S. intellectual property, manufacturing technology, and existing inventory relating to its total elbow implant and bone cement products, and it facilitates DJO’s hiring of the Biomet sales representatives and other staff who work with these products.