According to a New York Time’s article posted on Tuesday, Dec. 23, possible acts of bribery allegedly committed by Biomet in foreign countries may have complicated the $13.35 billion merger with Zimmer Holdings.
According to the New York Times, Biomet is currently suspected of helping to bribe government officials in Mexico and Brazil. An “anonymous whistle-blower” reportedly outed the company’s activity via email, reporting distributors at Biomet hired to sell its orthopedic devices were reportedly paying kickbacks to government doctors.
The New York Times also reports the fate of the merger between the two companies now partially hinges on the bribery investigations being conducted by the Justice Department and the Securities and Exchange Commission. According to the New York Times, the case is a reminder of the separate 2012 federal case that accused the company of foreign bribery as well.
“Although Biomet disclosed the thrust of its problems to Zimmer before striking the deal — and neither company has shown signs of abandoning it — an unexpectedly steep penalty for Biomet could alter the price of the deal,” states the New York Times.
According to the New York Times, though Biomet employees are being investigated by the Justice Department, it is reportedly unlikely there will be a steep fallout for the company. “According to the lawyers briefed on the matter, the Justice Department has discussed the possibility of reaching a so-called deferred prosecution agreement with Biomet that would withhold criminal charges in exchange for certain concessions. Under that plan, prosecutors would impose criminal charges only on Biomet’s Brazilian and Mexican subsidiaries,” the Times reports.
It is unclear how Biomet’s merger will factor into the government’s case, if at all. Biomet, Zimmer, the S.E.C. and the Justice Department reportedly declined to comment. For the full story by the New York Times, click here.