Investor doesn’t think Covidien, Shire mergers at risk

COVIDIEN PLC, whose U.S. headquarters is based in Mansfield, Mass., has been acquired by medical device giant Medtronic Inc. for $42.9 billion. / COURTESY COVIDIEN PLC
COVIDIEN PLC, whose U.S. headquarters is based in Mansfield, Mass., has been acquired by medical device giant Medtronic Inc. for $42.9 billion. / COURTESY COVIDIEN PLC

BOSTON – An investor in two large Bay State health care companies involved in separate mergers said he doesn’t expect the U.S. Treasury’s recently announced measures aimed at cracking down on corporate tax inversions to derail those plans, the Boston Business Journal reported.
The companies to be acquired – drugmaker Shire PLC and medical device company Covidien, both are headquartered in Ireland but have a significant presence in Massachusetts. Together, they employ 3,500 people locally.
Shire, which has a facility in Lexington, has an agreement to merge with Chicago-based AbbVie in a $53 billion deal – the largest-ever so-called tax-inversion deal, the newspaper reported. That deal, which spurred most of the 84 percent stock increase the company has seen this year, is still pending and was expected to close before the end of the year.
A $43 billion deal in which Minneapolis-based Medtronic plans to acquire Irish medical device maker Covidien, which has U.S. headquarters and most of its executives in Mansfield, could also be at risk. That deal was expected to close in the fourth quarter of this year or in early 2015.
Newspaper reports state that the U.S. Treasury action seeks to make inversions more difficult and harder for companies that invert to use cash that’s overseas.
Chris DeMuth, a partner at Connecticut-based Rangeley Capital which owns less than 5 percent of the shares of both Shire and Covidien, told the Boston Business Journal that he doesn’t expect those changes to hold up the deals.

No posts to display