Medtronic adjusts $43B deal over inversion rules
Medical device maker Medtronic is switching to $16 billion in financing to complete its purchase of Ireland-based competitor Covidien a few weeks after federal regulators issued rules designed to curb overseas acquisitions that cut tax U.S. tax bills.
The Minneapolis company says it will use financing instead of cash from its foreign subsidiaries to help close the nearly $43 billion deal it announced in June. A company spokesman says the change was in response to the new rules from the U.S. Treasury Department.
Medtronic Inc. plans to buy Covidien Plc in a cash-and-stock deal, and the combined company will have executive offices in Dublin, where it will benefit from Ireland’s lower corporate tax rates.
These deals, known as inversions, have had some in Washington calling for action to prevent lost tax revenue.