Medtronic to buy Covidien for $43bn


US medical technology firm Medtronic is to buy Irish-registered company Covidien for $43 billion (£25 billion). The deal continues a theme of consolidation within the medical devices sector, with firms looking to broaden their product and service portfolios and bring to bear efficient, globalised supply chains and sales forces.

Medtronic has also struck a deal with pharma major Sanofi to collaborate on treatment systems for type 2 diabetes, combining Sanofi’s expertise in insulin products with Medtronic’s capabilities in glucose monitoring and insulin delivery.

The deal follows several other acquisitions in recent months, most notably musculoskeletal implant giant Zimmer agreeing to buy rival Biomet for $13 billion in April this year.

Another advantage for Medtronic, one that mirrors Pfizer's attempted takeover of AstraZeneca, will be an ‘inversion’ in its registered tax base. Covidien moved its executive offices from the US to Ireland in 2009, before the US tightened rules on companies moving abroad to reduce corporation tax rates. But the size of this deal means sufficient shares in the new company will be held abroad to allow the merged firm to claim Ireland as its tax base. This will allow the company to avoid heavy taxes on repatriating cash assets held outside the US. 


Related Content

Shire fends off AbbVie takeover bid

23 June 2014 Business

news image

Board says deal undervalues the company and its growth potential

Business roundup

27 January 2012 Business

news image

Industry news, February 2012

Most Read

Breakup reaction hints at handedness of nature

25 September 2014 Research

news image

Dissociation of 3-bromocamphor provides clues on why nature favours one mirror image of a molecule over another

Perovskite solar cells show hydrogen production promise

26 September 2014 Research

news image

Highly efficient solar cells and catalysts made from cheap, common materials use sunlight to split water

Most Commented

Viruses melt ‘glassy’ DNA

1 October 2014 Research

news image

Researchers have shown how viruses liquefy their own DNA ready to inject into host cells

Perovskite solar cells show hydrogen production promise

26 September 2014 Research

news image

Highly efficient solar cells and catalysts made from cheap, common materials use sunlight to split water