Medtronic to Acquire Covidien for $42.9 Billion

June 15, 2014—Medtronic, Inc. and Covidien announced that they have entered into a definitive agreement under which Medtronic has agreed to acquire Covidien. The businesses of Medtronic and Covidien will be combined under a new entity to be called Medtronic plc, which will have its principal executive offices in Ireland and its operational headquarters in Minneapolis, Minnesota. Covidien’s headquarters are currently in Ireland, where both companies have a longstanding presence. Medtronic’s Chairman and Chief Executive Officer Omar Ishrak will lead Medtronic plc.

According to the companies, the cash-and-stock transaction is valued at $93.22 per Covidien share, or a total of approximately $42.9 billion, based on Medtronic’s closing stock price of $60.70 per share on June 13, 2014. The Boards of Directors for both companies have unanimously approved the transaction. 

The companies advised that consummation of the transaction is subject to certain conditions, including approvals by Medtronic and Covidien shareholders. In addition, the proposed transaction requires regulatory clearances in the United States, the European Union, China, and certain other countries. The transaction is expected to close in the fourth calendar quarter of 2014 or early 2015.

The companies advised that as a direct benefit of the new financial structure, Medtronic will commit to $10 billion in technology investments over the next 10 years in areas such as early stage venture capital investments, acquisitions, and research and development in the United States, which is above and beyond Medtronic’s and Covidien’s existing plans.