Medtronic CEO Omar Ishrak has defended the company's decision to merge with Covidien despite criticism of the inversion deal by lawmakers.
The world’s fourth-largest medical device company by revenue rocked the industry this year with its June announcement of a $42.9-billion merger with Ireland-based Covidien, the world’s eighth-largest device maker by revenue.
The move will significantly expand Minnesota-based Medtronic’s global footprint and free up $10 billion to fund R&D over the next decade. As part of the deal, Medtronic will also relocate its headquarters overseas, saving up to $4.2 billion in taxes, according to the Minneapolis StarTribune.
The inversion deal has drawn the ire of President Obama and Democratic lawmakers, and helped spur new federal regulations to make similar deals more difficult in the future. But analysts speculate that it may also set off a rash of medtech megamergers as Medtronic’s competitors scramble to build scale.
[image courtesy of MEDTRONIC]