Medtronic Buys Competitor Based In Ireland For $43B
Get Breaking News First
MINNEAPOLIS (WCCO) — Big changes are coming to Twin Cities-based Medtronic, which has released more details about an upcoming merger with Irish-based medical device manufacturer Covidien.
On Sunday night, the Twin Cities based company announced plans to buy Covidien for $42.9 billion. If approved, it will be one of the 25 largest mergers in corporate history.
Medtronic employs 8,000 people in Minnesota. The company said its operation headquarters and those 8,000 workers will stay in Minnesota, but the executive offices will move to Dublin, Ireland.
The Director of the Center for Health and Medical Affairs at the University of St. Thomas, Daniel McLaughlin, said the strategy for Medtronic is to get more price-competitive, worldwide.
“We’re still going to have an awful lot of the operations here in Minnesota. As long as we continue to provide doctors and inventors and engineers here in Minnesota that can do new products, they’re going to be sold all over the globe. So, I think this is actually a great move,” McLaughlin said
The move will allow the company to benefit from a lower corporate tax rate of one to two percent.
Some of the savings will be reinvested back into the United States. The company is committed to investing $10 billion in research and development over the next decade. That commitment also comes with a promise to Gov. Mark Dayton of 1,000 new jobs in Minnesota over a five-year period.
“This is about a great Minnesota company becoming bigger and stronger and having more wherewithal to invest back in the United States and, specifically, Minnesota. We expect to grow larger in Minnesota over time,” said Chris O’Connell, executive vice president and president of Medtronic’s Restorative Therapies Group.
Medtronic was founded in Minnesota 65 years ago. The company is known for manufacturing pacemakers, insulin devices and other medical equipment. Covidien manufactures surgical equipment.
The merger still needs approval from shareholders on both sides as well as regulatory clearances in the United States, China, E.U. and other countries.
In a statement, Dayton said, “I am greatly reassured by Medtronic’s assurances that their commitments to their Minnesota headquarters and their Minnesota employees will continue to grow in the years ahead.”