Australian Competition and Consumer Commission (ACCC) on Wednesday said, it will not oppose the proposed acquisition of Gambro AB by Baxter International Inc. This decision of the Commission follows an undertaking submitted by Baxter that it will sell part of its Renal Replacement Therapy business.

Baxter and Gambro are global suppliers of Renal Replacement Therapy (dialysis) products.

ACCC, after consultation with a range of market participants, had identified competition concerns in the supply of Continuous Renal Replacement Therapy (CRRT). ACCC has held consultations with hospitals, state health boards, clinicians and alternative suppliers.

Dialysis is an artificial process that performs the key kidney related functions of a patient suffers kidney deterioration or failure.

Baxter and Gambro are the largest two of three suppliers of CRRT products in Australia.

Considering the size of both companies, ACCC feared the proposed acquisition would affect the markets for the supply of kidney dialysis systems for the treatment of acute and chronic kidney disorders.

"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.

Considering that the acquisition involved a global transaction, the case was also reviewed by several international competition agencies including the European Commission and the New Zealand Commerce Commission.

The report said, Baxter agreed to divest its global CRRT business to Nikkiso Co. Ltd in order to address competition concerns identified by the European Commission.

The companies 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.

ACCC said it will issue a public competition assessment in due course.