Tuesday, September 23rd14.4°C
23284
23088

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

23423


Recent Trending




Today's Market
S&P TSX15152.63+23.63
S&P CDNX925.56-2.53
DJIA17130.30-42.38
Nasdaq4529.657+1.968
S&P 5001990.89-3.40
CDN Dollar0.9036-0.002
Gold1223.30+5.40
Oil91.50-0.91
Lumber329.50+2.90
Natural Gas3.924+0.016

 
Okanagan Companies
Pacific Safety0.16-0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.29+0.02
Cantex0.05+0.01
Anavex Life Sciences0.2039-0.0156
Metalex Ventures0.055+0.005
Russel Metals34.77-0.60
Copper Mountain Mining2.41+0.01
Colorado Resources0.160.00
ReliaBrand Inc0.0206-0.0043
Sunrise Resources Ltd0.02-0.005
Mission Ready Services0.270.00

 



22831

FEATURED Property
2059052SPALLUMCHEEN/ARMSTRONG
3 bedrooms 1 baths
$265,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Is this a fair offer from ICBC?

“Is this a fair offer from ICBC?”…. “How much should I settle for?”… “What is my claim worth?” These are just some of the questions I regularly get as...


Disruptive innovation

Last night I was privileged to be able to speak at the Greater Westside Board of Trade business awards dinner. Photo: ContributedI talked about Innovation and Collaboration which are two very interes...


Executors and their duties

There will be a time when you will need to decide who you should appoint as executor of your Will. As well, there may be a time when you will be asked by someone to act as the executor of his or her W...

_



23448




Member of BC Press Council


22786