June 14 Medical-device maker Medtronic Inc
and rival Covidien PLC are in advanced talks to
combine in a deal that could be worth more than $40 billion, the
Wall Street Journal reported on Saturday, citing people familiar
with the matter.
The Journal said the deal, which could be announced on
Monday, would be structured as a so-called tax inversion,
according to one of the people.
In such deals, acquirers buy companies based in countries
with lower corporate tax rates than their own as a means of
lowering their overall rate. Covidien is based in Ireland, which
is known for having a relatively low tax rate.
Minneapolis-based Medtronic, which makes cardiovascular and
orthopedic devices, has a market value of about $61 billion.
Covidien, which makes devices used in surgery, is valued at
about $32 billion.
Pfizer Inc recently mounted an abortive takeover bid
for British-based AstraZeneca in what would have been a
roughly $120 billion deal aimed in part at lowering the U.S.
drug firm's corporate tax rate.
(Reporting by Eric Beech, editing by William Hardy)