Medtronic's $43 billion acquisition of Covidien or EU approval next month

Source: Biovalley on October 14, 2014, Medtronic, the US medical equipment manufacturer, has asked EU antitrust regulators to approve its US $43 billion acquisition of Irish peer Covidien, the European Commission said on Monday EU competition authorities have set November 14 as the deadline for decision-making, at which time either unconditionally approve the transaction, or require Medtronic to make concessions to eliminate possible antitrust issues, or conduct in-depth investigations At present, Medtronic, headquartered in Minneapolis, USA, is the world's largest independent medical equipment manufacturer, with a market value of 61 billion US dollars It has a large number of products, ranging from cardiac defibrillators, cardiac stents, insulin pumps and spinal implants The company is a leader in the spinal therapy and pacemaker market Covidien is an Irish manufacturer of surgical equipment, mainly focusing on the R & D and sales of surgical instruments such as surgical sutures and ventilators, with a market value of about US $32 billion Ishrak, chairman and CEO of Medtronic, once said that Medtronic and Covidien have their own advantages and characteristics, but they have the same goal, and the merger and acquisition transaction will make both sides get rapid development After the merger, the new company will become a giant manufacturer with 87000 employees and 150 countries The acquisition will enable Medtronic to compete with JNJ, the industry leader, and through this transaction, Medtronic can move its headquarters to Ireland where Covidien is located, so as to take advantage of the low local tax rate and reduce the total global tax burden of Medtronic However, Medtronic said the acquisition was not a "tax inversion" deal (a policy for US companies to obtain tax incentives in Europe through M & A), but an initiative to improve its medical technology strategy, and the acquisition of voidien would help Medtronic expand its market share Medical device manufacturers have seen slower revenue in recent years and come under pricing pressure as overseas governments cut budgets and the United States is reforming its health care system In addition, because patients are unwilling to seek medical care because of lack of medical insurance or high medical costs, and the demand for medical services is not strong, major hospitals are seeking to reduce costs by integrating suppliers Analysts said there should be no significant regulatory concerns because Medtronic and Covidien have different businesses and have very few product overlaps