UPDATE: Oct. 16, 2020: Stryker in an SEC filing Thursday said it entered into a "definitive agreement" with Colfax Corporation for the previously announced proposed divestiture of Stryker’s STAR total ankle replacement product and related assets, as well as finger joint replacement products.

The medtech giant last month proposed divesting the businesses to Colfax subsidiary DJO Global in connection with regulatory review of Stryker's not-yet-closed $4 billion acquisition of Wright Medical. The divestiture is contingent upon regulatory approvals and "other customary closing conditions."

Dive Brief:

• Stryker disclosed Wednesday that in conjunction with U.S. and U.K. antitrust reviews of its approximately $4 billion acquisition of Wright Medical, Colfax subsidiary DJO Global is the proposed buyer for planned divestitures.

• In a filing to the U.S. Securities and Exchange Commission, Stryker flagged a notice published by the U.K. Competition and Markets Authority (CMA), also Wednesday, greenlighting its orthopaedics competitor DJO Global as a suitable purchaser of Stryker's total ankle replacement business and related assets. The agreement appears to clear the last hurdle to a final OK from U.K. regulators, with CMA confirming that the proposed sale resolves its prior concerns that may have required a phase 2 investigation of the merger.

• In addition to divesting the ankle business, Stryker said in the filing it has also proposed to the U.S. Federal Trade Commission that DJO buy its finger joint replacement products.

Dive Insight:

From the time the Stryker-Wright deal was first announced, analysts flagged the STAR product line in particular as likely to come under fire from antitrust regulators as Stryker is poised to gain Wright's extremities products. Indeed, U.S. regulators called out the overlap in Stryker and Wright's ankle businesses at the very end of 2019 and faced similar concerns from U.K. regulators in 2020.

CMA in July signaled that Stryker's subsequent proposed divestiture of its existing total ankle replacement business could satisfy its concerns, and on Wednesday gave its approval of DJO Global as a suitable buyer.

"The CMA believes that the Proposed Undertakings, or a modified version of them, are effective and capable of amounting to a sufficiently clear-cut remedy to resolve the CMA’s competition concerns," the agency wrote in a notice Wednesday. "In light of ready purchaser interest, the CMA considers that the sale process can move forward quickly and that signing of an asset purchase agreement is achievable prior to the expiry of the CMA’s deadline of 4 November 2020."

Still, there remains room for modifications. CMA is accepting comments in response to its notice through Sept. 16.

Colfax Corporation completed its $3.15 billion acquisition of DJO Global early last year, one of the largest orthopaedics deals of the last decade. DJO competes in many of Stryker's same markets, including spine, hip, knee, shoulder, as well as hand and wrist and foot and ankle. DJO is not currently active in the U.K. total ankle replacements market, CMA noted.

Mirroring industry trends during the pandemic, Colfax reported sales in its medical technology segment were down 35% during the most recent quarter. On the ankles front, Jefferies analysts estimated last year the STAR product line to be worth between $20 million and $30 million.

Stryker last week extended its $30.75 per share offer for Wright Medical stock for a fourth time since the deal was first announced Nov. 4 last year. On an end of July earnings call, Stryker management widened its projected timeline for the deal to close from the third quarter to early in the fourth quarter.