US medical device maker Medtronic is to buy Irish Republic-based Covidien in a $42.9bn (£25.3bn) cash and shares deal.
Medtronic's wide portfolio includes heart stents and surgical tools.
The deal allows Medtronic to take advantage of a so-called tax inversion, by moving its headquarters to a European country with lower taxes.
The main corporate tax rate in Ireland is set at 12.5%. Meanwhile in the US, the business tax rate can reach up to 35% - among the world's highest.
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