Paul Nouri, CFP
Hedge fund manager, long/short equity, healthcare

Could Medtronic Have Better Spent $43 Billion?

Medtronic (NYSE:MDT), the largest independent med-tech company in the U.S., announced a deal to acquire Covidien (COV), a significant med-tech peer, for $93.22 per share, representing a 29% premium from the closing price on June 13. Given the significant premium and fair valuation, I don't expect significant shareholders to attempt to block the deal. Also, given that the two companies' product portfolios don't overlap significantly, I don't expect the FTC will intervene. With that being said, it's worth evaluating the deal and whether it is money well spent for Medtronic.

It looks like this acquisition was consummated primarily to expand Medtronic's product line. I say this because at roughly $17 billion in revenue, Medtronic already has the manufacturing...

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