October 22, 2014 by Brad Perriello
Shares of Medtronic and Covidien gain after Medtronic affirms its $43 billion acquisition plans, saying it now expects to close the deal for Covidien late this year or early in 2015.
Shares of Medtronic (NYSE:MDT) and Covidien (NYSE:COV) both closed up yesterday after Medtronic affirmed its intention to consummate a $43 billion union with Covidien.
In a regulatory filing yesterday, Medtronic said it now expects the deal to close late in the 4th quarter or early in 2015. Investors reacted by sending COV shares up 4.5% to an $89.25 close yesterday; MDT shares closed up 1.8% at $64.98 each.
Medtronic also said that it’s board still supports the deal despite stricter U.S. Treasury rules on inversion deals, in which a U.S.-based company lowers its overall tax base by acquiring a foreign-based firm like Covidien, which is domiciled in Ireland but run from Mansfield, Mass. Medtronic responded by saying it would use external debt rather than the billions it has in offshore cash to finance the deal.
