Jun 15, 2014

Medtronic buying Covidien

Big news in the medical device world:

U.S. medical device maker Medtronic said on Sunday it had agreed to buy Covidien for $42.9 billion in cash and stock and move its executive base to Ireland in the latest transaction aiming for lower corporate tax rates abroad.
As big as they are, these two companies don't have that much overlap in the products they sell.  Medtronic focuses on cardiovascular, while Covidien does not have many products in that space.  So from that perspective the deal makes sense.  Although one of the main benefits seems to be a tax advantage for Medtronic, when you're paying $42 billion for a company for a tax advantage, I think it is a clear sign that the US corporate income tax is too high.

On the other hand, the stock market is at an all time high, so you're buying a company at its most expensive. If you're buying it with your shares which are also at all time high, then maybe it all works out, but you have to pay the buyout premium of 40% or whatever it turns out to be.

Entertainingly enough a few years ago Covidien bought ev3 (among others) and was still working on re-branding their products world wide, assuming they re-brand to Medtronic, at this rate, they'll never catch up.

Regardless, we'll see how this deal works out in the long run.

27 comments:

Archana Kumari said...

Very good article. Thank you for sharing.
"medicine manufacturers"

Shyla John said...

You have written very good post on Medtronic buying Covidien. It contains good contents to explain.

Patricia Van Degna said...

Hey thanks for nice sharing .For more information aboutDoctor Billing Service Miami

Navin Kumar said...

Awesome! I like your starting words to keep the visitor stay and read your full blog post. Anyhow the overall post is really informative and contains tons of knowledgeable factors. Thank u so much for sharing this post.I wanna share some information about Hospital Furniture manufacturer and Exporter for you.Please visit: http://www.original-medical.com

Medical equipment said...

This is great work, i appreciate your hard work you did. keep it up.

Ramona d’Viola said...

Dear Blog Editor,
I recently authored a piece about an ophthalmologist who travels to Africa and treats patients suffering from degenerative eye diseases at his own expense. He approached my company to create a custom case for his scope that would withstand the rigors of traveling within Africa, and we were proud to be a part of his successful missions.

Does your organization accept stories from guest bloggers? If so, I’m hopeful you’ll be interested in publishing his story on your site. Please let me know if you might be interested and I will the article for your review.

Thank you in advance. I look forward to hearing from you soon.

Best regards,

Ramona d’Viola
Ramona@echo-factory.com
510-847-8831

smith androsun said...
This comment has been removed by the author.
Mike Copper said...

Great Blog..!!!

You gave such a wonderfull knowledge about Medtronic buying Coviden. Thanks for sharing.

Natural Living said...

As you write this blog about Medtronic buying Coviden, its too good way to share information. You way of describe Medtronic buying Coviden is very good.


Medical equipment

Waterloo Spine and Sports said...


Thanks to share nice information. Well we are the leading chiropractic waterloo massage therapist. We are recognized as a well known Chiropractic Waterloo, Waterloo Massage , chiropractor waterloo, Massage Waterloo, Waterloo Chiropractic,Waterloo Chiropractor . For more information visit us at www.waterloospineandsports.com.au

Socrates Cafe for Patient Safety said...

Medtronic and Covedien is a great combination.Both have good management.

Dev Raheja
Author: Preventing Medical Device Recalls.

Bina Besiege said...

I guess with US economy unexpectedly booming, it has resulted in a flurry of activities in the corporate world. But as very rightly said, this acquisition throws up new challenges, re-branding of all the recent acquisitions of the Covidien is going to be a challenge, as it is going to take a very long time.

This is not the first time when any business has moved to Ireland for low corporate taxes there. I think Federal government needs to realize the importance of a reform there.

Bad Crdit Loans said...

Thanks to share nice information. As you write this blog about Medtronic buying Coviden, its too good way to share information.

Carolyn Taylor said...

It is great post to read. Thanks for sharing.


Kaplan Lecture Notes Usmle Step 1 2015

Jessica Brown said...

Very attentive way of writing style! unique and interesting. thanks for sharing it.

Thesis Writing Service

Jessica Brown said...

very useful blog. I'm sure this will help others

Essay Writing Online

Humaun Kabir said...

Thank you for your so cool post,it is useful,i love it very much. Please share with us more good articles on Medical device sales.

Frank Sit said...

Thanks for the sharing. It is extremely helpful for me.
Medical Equipment Manufacturer in China

Frank Sit said...

Thanks for all your efforts that you have put in this .very interesting information.i would like to do all the

information.


ALOKA UST-

9118

Sapna Kapoor said...

Your approach to this topic is unique and informative. I am writing an article for our school paper and this post has helped me. Thanks.

Toshiba PVT-375BT

Sapna Kapoor said...

Your approach to this topic is unique and informative. I am writing an article for our school paper and this post has helped me. Thanks.

Toshiba PVT-375BT

Laduuz In said...

interesting post thanks for sharing with us . I am sharing how to Registration FDA Drug in USA it will help for others

Jonam R said...

Good to know about the information, the following also briefs about the countrys having FDA approvals outside U.S. FDA approvals outside U.S.

Amisha Patel said...

Its a valuable content shared,would like to know more about it.

moulded parts for medical

Anonymous said...

I am extremely impressed together with your writing abilities as well as with the format for your weblog. Anyway stay up the excellent high quality writing, it is uncommon to see a nice blog like this one today.
Plastic Pressure Gauge

plastic injection molding said...

This is great information. I learned a lot here.

Waterloo Chiropractic & Myotherapy said...

Thanks for sharing Very helpful information..I'm also leading Waterloo Chiropractic and Myotherapy. We very well know about Waterloo chiropractic, chiropractor Waterloo, waterloo chiropractor, Zetland chiropractor, chiropractor zetland,
zetland chiropractic Get more info visit our website.www.waterloochiroandmyo.com.au/