Friday, February 27th3.9°C
25355
25068

Medtronic to buy Irish manufacturer Covidien in latest acquisition among medical-device makers

U.S. medical device manufacturer Medtronic announced Sunday night that it has agreed to buy Ireland-based competitor Covidien for $42.9 billion in cash and stock.

The combined company would have its executive offices in Dublin, where it could benefit from Ireland's lower corporate tax rates. But the merged company would continue to operate in Minneapolis, where Medtronic employs more than 8,000, the companies said in a statement.

Medtronic is paying a 29 per cent premium on Covidien's stock price as of Friday. The shares had closed at $72.02 on the New York Stock Exchange.

The deal is the latest in a series of acquisitions by medical-device manufacturers. The companies are seeking to expand their offerings and contain costs in response to price curbs forced by the nation's new health care law.

In April, Zimmer Holdings, an orthopedic device maker, announced that it was buying Biomet in a $13 billion deal.

Medtronic makes pacemakers and insulin pumps, among other products. Covidien specializes in surgical equipment.

As a result of savings from the deal, Medtronic said it would spend an additional $10 billion over the next decade in investments, acquisitions and research and development in the United States.

"The medical technology industry is critical to the U.S. economy, and we will continue to invest and innovate and create well-paying jobs," Omar Ishrak, Medtronic's CEO, said in a statement.

Efforts by domestic companies to use mergers to reincorporate overseas for tax reasons have raised concern among some U.S. lawmakers. Ireland taxes corporate income at 12.5 per cent, compared with a top marginal rate of 39.6 per cent in the United States, according to the tax advisory firm KPMG.

Drug-maker Pfizer recently tried unsuccessfully to acquire U.K.-based Astra-Zeneca. The banana-seller Chiquita agreed to buy an Irish firm, Fyffes, in March.

Sen. Carl Levin, D-Michigan, and 13 other senators introduced a bill in May to restrict the deals.

"These transactions are about tax avoidance, plain and simple," Levin said in a statement. "Our legislation would clamp down on this loophole to prevent corporations from shifting their tax burden onto their competitors and average Americans."

The Canadian Press


Read more Business News

24909


Recent Trending




Today's Market
S&P TSX15265.71+24.55
S&P CDNX704.11+3.18
DJIA18132.38-82.04
Nasdaq4963.528-24.362
S&P 5002104.49-6.25
CDN Dollar0.7998+0.0007
Gold1203.00+6.10
Oil51.64+1.25
Lumber296.70+1.20
Natural Gas2.895-0.007

 
Okanagan Companies
Pacific Safety0.12+0.005
Knighthawk0.010.00
QHR Technologies Inc1.55-0.03
Cantex0.035-0.005
Anavex Life Sciences0.190.00
Metalex Ventures0.035-0.005
Russel Metals25.48+0.18
Copper Mountain Mining1.30+0.04
Colorado Resources0.15+0.015
ReliaBrand Inc0.008-0.0007
Sunrise Resources Ltd0.05+0.015
Mission Ready Services0.235+0.025

 



24153

FEATURED Property
19260003179 Via Centrale
1 bedrooms 1 baths
$242,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Creating your retirement vision

A vision means different things to different people. To the head of a large corporation, it’s the ability to chart a course that will deliver success (think Steve Jobs and Apple), to a shaman, i...


It's OK to say 'I'm sorry'

Photo: ContributedStand-up comedians and sitcoms have been making fun of Canadians for being polite as long as I can remember. Being known for our niceness is certainly not a bad thing and I wish more...


Are you asking the right questions?

Have you ever had this happen to you? You are in the middle of your second or third good discussion with a prospect and everything seems to be going great. The prospect seems engaged and happy to work...

_








Member of BC Press Council


24843