Medtronic becomes Ireland’s largest business
Medical device giant starts trading in New York after corporate inversion deal with Irish-based Covidien
Omar Ishrak, chief executive officer of Medtronic. Photographer: Chris Ratcliffe/Bloomberg
Medical device group Medtronic becomes Ireland’s largest company when it starts trading on the New York Stock Exchange Tuesday.
Following Medtronic Inc’s $49.9 billion acquisition of Dublin-domiciled surgical supplies group Covidien, the Minneapolis-based business has moved its corporate headquarters to Ireland in a new holding company, Medtronic plc, under the largest corporate inversion to date.
The company will have a market capitalisation of around $100 billion when trading opens in New York. That compares with the $18.4 billion value of Ireland’s largest indigenous business, CRH, which accounts for 22 per cent of the entire Irish Stock Exchange main list.
Medtronic announced its intention to merge with Covidien in a $42.9 billion deal last June and the deal was concluded Monday when the High Court sanctioned the scheme of arrangement.
Part of the attraction for the US-business was the access that foreign domicile would give it to a $13 billion cash pile that it could not bring back to the US without paying significant corporation tax.
It was also looking to expand its product range in an effort to become a one-stop shop for hospital buyers and to diversify its exposure geographically.
Since June, Medtronic’s shares have jumped by about 25 per cent, increasing the value of the deal to just shy of $50 billion.
With combined revenues of around $27 billion, Medtronic will challenge Johnson & Johnson for primacy in the global medical device sector.
Medtronic and Covidien employ around 4,000 people in Ireland and chief executive Omar Ishrak said the merger was unlikely to lead to major rationalisation of the combined group’s Irish operations.