Perhaps presaging a sale or merger, Sweden-based kidney dialysis giant Gambro Healthcare and its U.S. subsidiaries cleared up their legal books last week by settling two lawsuits.
Rumors surfaced last week about a possible deal between Gambro and Deerfield, Ill.-based Baxter International. Last year, Gambro and Baxter formed a joint venture that resulted in a new company, Tandem Healthcare, which manufacturers filters for dialysis equipment. Baxter also operates 160 dialysis clinics in 12 countries outside the U.S.
Gambro, the world's second-largest provider of dialysis services, owns 483 clinics in 31 states and the District of Columbia. It also owns a clinical laboratory in Fort Lauderdale, Fla.
Gambro officials declined comment on the merger rumors, and Baxter executives were unavailable for comment at deadline.
On July 12, subsidiary Gambro Healthcare of Michigan settled a 1999 antitrust lawsuit brought by Michigan Attorney General Jennifer Granholm for $175,000 and an agreement to divest three of the six outpatient dialysis clinics that it operates in three western Michigan counties.
The company also is required to donate another $175,000 to the National Kidney Foundation of Michigan.
A day later, Gambro agreed to pay $53.2 million to settle allegations that its two clinical laboratories in Florida submitted false bills to Medicare and other federal insurance programs between 1994 and 1998. One of the two, in Deland, closed in 1998.
The settlement resolves a 1998 civil fraud whistleblower lawsuit against the company.
"We are very pleased to put this issue to an end," said Gambro Healthcare President and Chief Executive officer Brad Nutter.
Jeremy Green, an analyst who tracks European healthcare companies for the London office of Salomon Smith Barney, said he doesn't read much into the timing of the two settlements reached this week.
But Green added: "Generally speaking, you do tend to do deals once the house is in order."