By Foo Yun Chee


(Reuters) - EU antitrust regulators are expected to give conditional clearance to U.S. medical device maker Abbott Laboratories' <ABT.N> $25 billion bid for rival St. Jude Medical Inc <STJ.N>, a person familiar with the matter said on Tuesday.


A spokesman for the European Commission, which is due to decide on the deal by Nov. 23, declined to comment. Abbott, which also makes prescription drugs and diagnostics, had no immediate comment. St. Jude officials could not be reached for comment.


Abbott Chief Executive Miles White in October said he hoped to acquire St. Jude by the end of the year, despite lingering questions about the safety of its implantable heart devices.


The suburban Chicago company announced the St. Jude deal in April to expand its heart device business and help it compete against larger rivals Medtronic Plc <MDT.N> and Boston Scientific Corp <BSX.N>.

The companies offered concessions to address the European Commission's concerns on Oct. 31 but did not disclose details.

However, two weeks before that, they announced the sale of some of their medical devices worth about $1.12 billion to Japanese company Terumo Corp <4543.T>, saying the move was part of their deal.

The all-cash transaction included St. Jude Medical's Angio-Seal and Femoseal vascular closure products and Abbott's Vado Steerable Sheath.

St. Jude is facing multiple problems, including an investigation by the U.S. Food and Drug Administration over claims its heart devices have defects that make them vulnerable to fatal cyber hacks.

The company sued short-seller Muddy Waters and its investment partner, cyber research firm MedSec Holdings, after they claimed flaws in the cyber security of its devices. MedSec warned the alleged flaws could cause implanted devices to pace at potentially dangerous rates or have their batteries drained.

After Abbott reported stronger than expected earnings on Oct. 19, White praised the way St. Jude has handled Muddy Waters' allegations.

In an unrelated matter last month, St. Jude said it will recall some of its 400,000 implanted heart devices due to the risk of premature battery depletion, a condition linked to two deaths in Europe.

Shares of Abbott and St. Jude both closed 1.6 percent higher on Tuesday amid moderate gains for the broad stock market.

Mergers in the sector have underscored the pressure felt by medical equipment makers to scale up and offer a wider range of products to hospital customers.

(Reporting by Foo Yun Chee in Brussels; Additional reporting by Natalie Grover in Bengaluru and Ransdell Pierson in New York; Editing by Ruth Pitchford and Matthew Lewis)