Skip to main content

Medtronic to buy rival Covidien for $42.9 billion


Minnesota-based Medtronic has announced it is acquiring one of its main rivals -- Covidien -- for $42.9 billion in cash and stock. The firm announced the deal on its website Sunday evening.

Medtronic CEO Omar Ishrak will lead the combined company from its "operational headquarters" in Minnesota, where 8,000 employees are located. Its legal headquarters, however, will shift to Ireland, where Covidien's is located. Corporate taxes are quite a bit lower in Ireland than they are in the U.S., and that's one of the main reasons for the merger, the Business Journal reports.

It's not clear whether any jobs will be moved from Medtronic's Fridley headquarters to Ireland. Covidien’s U.S. headquarters are in Massachusetts, but it has a significant presence in Minnesota after a recent series of acquisitions, according to the Business Journal. Covidien has about 1,000 employees in Minnesota.

The company also said it would make an additional $10 billion in U.S. investments over the next decade, including money for research and development and acquisitions. The move may be an effort to show the company is not trying to move jobs out of the United States, the New York Times reports.

“The medical technology industry is critical to the U.S. economy, and we will continue to invest and innovate and create well-paying jobs,” Ishrak, said in a statement. “These investments ultimately produce new therapy and treatment options that improve or save lives for millions of people around the world.”

Minnesota Gov. Mark Dayton said in a statement Sunday night that Ishrak assured him the company's operational headquarters would remain in Minnesota, and that no jobs will be lost here due to this transaction. The company's pledge to grow jobs here, Dayton added, is "tremendous news for Minnesota and evidences the company's continued commitment to our state."

The merged company will become one of the largest providers of medical devices in the industry, with revenues of $27 billion and 87,000 employees in more than 150 countries, according to the company statement.

Medtronic specializes in pacemakers and spinal treatments, among other therapies. Covidien, a former unit of Tyco, focuses on surgical equipment like ventilators, sutures and needles, according to the Times.

Medtronic’s current market value is $60.8 billion, while Covidien is valued at $32.5 billion, USA Today reports.

There’s a trend toward companies merging for such tax advantages, called “tax inversions,” according to the Wall Street Journal. Many health care-related companies are trying to cut costs since the health care reform law went into effect earlier this year. The law puts limits on what those companies can charge for their products and services, says USA Today.

Medtronic has more than $20.5 billion in offshore holdings, according to the Business Journal, and moving its headquarters outside the U.S. would make that cash cheaper to access.

The deal, which was the subject of speculation in various news reports Saturday, has reportedly been in the works for some time. It's the largest acquisition ever for Medtronic, according to the Star Tribune. The deal is expected to close in the fourth quarter of 2014 or early in 2015.

Next Up

Franconia Sculpture Park - Lorie Shaull - Flickr

5 outdoor spots to explore on Black Friday (instead of shopping)

There's something for everyone on this list of Twin Cities destinations.

Pexels - woman grocery shopping mask covi

As COVID surges in MN, major cities not considering mask mandates

Cities are observing the situation, but at this point more stringent mitigation efforts are now imminent.

pexels sorry closed sign hand

What's open and closed on Thanksgiving Day 2021 in Minnesota?

From delivery services and government buildings, to retail shops and libraries.


Missing Fridley woman's body recovered from Mississippi River

Angelique Christine Lepsch was last seen leaving her home on Nov. 14.

mary franson without mask

GOPer's criticism of vaccine requirement sparks rush of support for St. Paul restaurant

"Vaccinated or not, no one should be participating in medical status segregation," Rep. Mary Franson said.

Justin Jefferson

Where the Vikings stand in the NFC playoff picture

Sunday's win over the Packers has the Vikings controlling their own destiny.

Target Store

Target will keep its stores closed on Thanksgiving for good

The big box retailer is also beginning holiday sales early this year.

school, classroom

Osseo district extends winter break to let teachers 'destress and re-energize'

The school board and district leadership team acknowledged the difficult circumstances the pandemic has created and decided to give everyone some extra time off.

Team Shuster

Team Shuster will defend gold medal at 2022 Beijing Olympics

The defending champs qualified for the February Olympics on Sunday night.


Two in critical condition after wrong-way crash in Minneapolis

Two others were also taken to the hospital with injuries.