MDT, COV: Medtronic, Covidien Reach $43B Merger Deal

On Sunday, Medtronic (MDT) announced that it will acquire Ireland-based Covidien (COV) for a 29% premium over the Friday closing price of COV stock. In Monday morning trading, COV shares jumped almost 21%.

MedtronicUnder the cash and stock deal, MDT will pay $93.22 for each COV share, valuing the deal at $42.9 billion. MDT will also relocate its executive team to Ireland in order to take advantage of Irish tax laws, Reuters noted.

MDT says that is alignment with COV on medical technology development outweighed the tax issue when deciding to relocate its management. The merged company will be better positioned to compete with medical device giant Johnson & Johnson (JNJ).

COV shareholders will hold a 30% stake in the merged company.

MDT stock sank more than 1% on the news. MDT stock closed at $60.70 per share on Friday.

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