Image By: Medtronic Inc. Medtronic will retain operational headquarters in Minneapolis, the site of its current world headquarters, but move its executive offices to Ireland.
Medtronic Inc. will acquire Covidien plc to create a medical device and supplies company with $27 billion in global sales.
Minneapolis-based Medtronic — already the world's largest stand-alone medical device maker — announced its plans June 15 to buy Covidien, based in Dublin, for $42.9 billion in cash and stock. After the sale closes, the new company will be called Medtronic plc and based in Ireland, but with operational headquarters in Minneapolis.
After the merger, the latest in a wave of medical device manufacturers being bought and sold, the new company will have a broader scope and more than 87,000 employees in more than 150 countries, putting the new device company on par with global medtech leader Johnson & Johnson.
Medtronic also pledged to invest $10 billion in additional technologies in the U.S. during the next 10 years, which will cover venture capital investments, research and development and additional acquisitions.
“The medical technology industry is critical to the U.S. economy and we will continue to innovate and create well-paying jobs,” said Omar Ishrak, Medtronic chairman and CEO, in a statement. “This combination will allow us to accelerate [our] investments.”
Combining the two businesses will provide greater global reach and a wider portfolio of products and services, the companies said.
The joint company will also have greater access to emerging markets, where it will have $3.7 billion in sales. Covidien has extensive capabilities in emerging market R&D and manufacturing, while Medtronic has established business in a broader product range that it can bring to those regions.