MEDTRONIC AND COVIDIEN MERGER

Anwar Muhammad Noor G1318113

Mohamed Azad G1419351

INTRODUCTION

• The largest trans Atlantic med tech mergers

• The merger was completed on 26th January 2015

• The companies faced many issues.

INDUSTRY OF THE MERGED FIRMS

BACKGROUND OF THE COMPANIES

Medtronic Inc.

BACKGROUND OF THE COMPANIES

Covidien Plc.

Merger Process

• General Merger Process– Step 1. Preliminary Assessment or Business

Valuation– Step 2. Proposal– Step 3. Exit Plan– Step 4. Structured Marketing– Step 5. Origination of Purchase agreement or

Merger Agreement– Step 6. Stage of Integration

The following conditions need to be satisfied in order for the deal to close.

• Covidien shareholder vote• Medtronic shareholder vote• Antitrust approval—U.S., EU, China, and

other countries• Court approval• SEC approval of MDT proxy statement

OFFER

• It is important to note first that Medtronic is acquiring Covidien. The cash-and-stock transaction is valued at approximately $49.9 billion.

• The cash-and-stock transaction of this agreement is valued at approximately $49.9 billion, based on Medtronic's closing stock price of $75.59 per share on Jan 26, 2015. Medtronic will pay the equivalent of $93.22 for each share of Dublin-based Covidien, or about 29 percent more than Covidien’s New York closing price of $72.02 on June 13.

CHRONOLOGY OF EVENTS

• June 15, 2015: A major Medtech Merger announced.• Early August 2014: Getting the Obama Treatment.• August 11, 2014: Medtronic Hires Political Top Guns• August 21, 2014: Longtime Shareholders Complain• September 24, 2014: Obama Administration cracks down • October 3, 2014: Medtronic Moving forward anyway• October 3, 2014:Another shareholder lawsuit• December 1, 2014: Many major Hurdles cleared • January 2, 2015: Last-Minute Criticism• January 6, 2015: Shareholders Approve• January 26, 2015: Final Hurdle• January 26, 2015: It’s a Deal

ISSUES RELATED TO THE DEAL

POST MERGER

The combined company, with officially joint forces of over 85,000 employees present in more than 160 countries and annual revenues of $27.4 billion in 2014

CONCLUSION• Although the Medtronic and Covidien merger has caused

many controversial issues the merger went through and is reaping Profits for its shareholders.

• The main challenge for the merger came from the anti-trust issues faced by such a larger merger and the US government stand against inversion.

• The company was able to use the large cash hoards outside US after the merger for the expansion of the company.

• After the merger the company have seen increasing share prices and the company has created value for the shareholders. So this merger can be considered as a very successful merger.

THANK YOU