Medtronic and Covidien in Talks to Merge

Here’s a biggie. The Wall Street Journal is reporting today that Medtronic and Covidien are in advanced talks about merging. The deal could be worth $40 billion.

The deal, which could be announced Monday, would be structured as a so-called tax inversion, according to one of the people. In such deals, acquirers buy companies domiciled in countries with lower corporate tax rates than their own as a means of reducing their overall rate. Covidien is based in Ireland, which is known for having a relatively low tax rate: its main corporate tax rate is 12.5%. In the U.S., home to Medtronic, the 35% rate is one of the world’s highest.

Remember that these are just talks, and anything can fall apart.

Posted by on June 14th, 2014 at 3:27 pm


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