Medtronic to buy Covidien

Combining the two huge medical device companies will have global implications.

The New York Times' Dealbook: Medtronic To Buy Covidien For $42.9 Billion
Medtronic agreed on Sunday to buy Covidien for $42.9 billion, combining two of the world's biggest medical device makers and helping it reduce its corporate taxes. The deal, which is being structured as a so-called inversion, will relocate Medtronic from its historic headquarters in Minneapolis to Covidien's corporate home in Ireland, whose tax rate is significantly lower than the United States (De La Merced, 6/15).

The Wall Street Journal: Medical Merger Part Of 'Tax Inversion' Wave
Covidien's U.S. headquarters are in Mansfield, Mass., where many of its executives are based. But officially it is domiciled in Ireland, which is known for having a relatively low tax rate: The main corporate rate in Ireland is 12.5%. In the U.S., home to Medtronic, the 35% tax rate is among the world's highest. ... The deal is subject to regulatory approval in a number of jurisdictions around the world. After completion, the combined company would have its main executive offices in Ireland. Its "operational headquarters" will be in Minneapolis, where Medtronic is currently based.(Cimilluca, Mattioli and Walker, 6/15).

Pioneer Press: Medtronic To Acquire Covidien In $42.9 Billion Deal
There has been growing interest in these so-called "inversion" deals, particularly among multi-national health care companies. It was part of the rationale for a proposed $119 billion deal by New York-based Pfizer to acquire AstraZeneca, a larger pharmaceutical company in Britain. Ultimately, the deal was abandoned in May. With the merger, Medtronic will have an even wider portfolio of innovative medical device products, and more technology to help doctors and hospitals provide efficient care (Snowbeck, 6/15).