June 14 (Reuters) - 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