- Confirming earlier reports, Medtronic (NYSE:MDT) is buying Covidien (COV) in a cash and stock deal valuing Covidien at $93.22 per share based on Medtronic's Friday close of $60.70. The price represents a near-30% premium to Covidien's Friday close.
- The transaction will have each share of Covidien converted into the right to receive $35.19 in cash and 0.956 shares of Medtronic.
- Medtronic expects the purchase to be accretive to cash earnings in the first fiscal year following the close (late this year, or early next), and significantly accretive thereafter, with $850M of annual pre-tax cost synergies by the end of fiscal 2018.
- As noted earlier, the purchase will have Medtronic moving its principal executive offices to Ireland, where corporate tax rates are lower than the U.S.
- Press release
- Previously: Medtronic in talks for $40B+ Covidien deal