U.S. court denies FTC request to stop Steris-Synergy merger

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WASHINGTON A federal court in Ohio refused on Thursday to stop a $1.9 billion purchase by U.S. medical technology provider Steris Corp of British sterilization services provider Synergy Health Plc, despite the objections of U.S. antitrust enforcers.

The Federal Trade Commission filed a lawsuit in May aimed at stopping the deal, saying it would hurt customers by eliminating likely future competition based on new sterilization techniques.

Steris' share price rose on the decision. It was up 6.3 percent for the day at $66.89 after the decision was announced. The company said it anticipated closing the transaction before the end of the year.

The FTC argued that the deal broke antitrust law because Synergy had scrapped its plans to enter the U.S.

"antitrust enforcers.The Federal Trade Commission filed a lawsuit in May aimed at stopping the deal, saying it would hurt customers by eliminating likely future competition based on new sterilization techniques.Steris' share price rose on the decision"market and open U.S. plants that would use x-ray to sterilize medical devices. Synergy's plants, the FTC said, would have competed with Steris plants that use gamma rays for the sterilization process.

The FTC had asked the court to temporarily stop the transaction from closing while it considered the deal in an administrative court at the agency. Delays in FTC internal proceedings generally end in the deal falling apart.

Steris and Synergy, for their part, argued that Synergy decided to scrap the expansion into x-ray in the United States because it found few customers interested in signing up.

The Ohio court agreed.

The FTC failed to show "by a preponderance of evidence" that it was likely to succeed on the merits of the case, said Judge Dan Polster in denying the FTC request to temporarily stop the deal.

Steris announced the transaction in October, saying it wanted to expand its footprint in Europe.

The plan is for Cleveland-based Steris to buy out UK-based Synergy Health, with the combined company managed from Ohio but incorporated in Britain. Such "inversion deals" can allow U.S. companies to get lower tax rates by reincorporating overseas.

"We are pleased with the court's decision and we will work to expeditiously close the acquisition of Synergy Health," Walt Rosebrough, president and CEO of Steris Corp, said in an emailed statement.

Both Steris and Synergy have shareholder votes on the transaction set for Oct. 2.

"The company said it anticipated closing the transaction before the end of the year.The FTC argued that the deal broke antitrust law because Synergy had scrapped its plans to enter the U.S"Synergy and Steris recently extended the deadline to complete the deal to Dec. 31.

The FTC had no comment.