Confirming earlier reports, Medtronic (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.
Previously: Medtronic in talks for $40B+ Covidien deal