Minneapolis-based Medtronic (NYSE: MDT) and Dublin, Ireland-based Covidien (NYSE:COV) have operations in Boulder County.
Medtronic said the cash-and-stock transaction would be valued at $93.22 per Covidien share, a 27 percent premium over its closing price on June 13, the final trading day prior to the announcement. Covidien’s stock mid-day Monday was trading at $86.93.
The boards of directors of both companies have approved the transaction. Combined, the two companies have annual revenue of $27 billion, including $3.7 billion from emerging markets.
Covidien has a large campus at 6135 Gunbarrel Ave. in Boulder with approximately 1,800 employees. About 1,400 work in the surgical solutions division, and 400 work in the respiratory- and monitoring-devices division.
Medtronic has its neurosurgery division based in Louisville, operating as Medtronic Navigation Inc. at 1480 Arthur Ave. in the Colorado Technology Center. About 300 workers are focused on making surgical imaging and surgical navigation tools, including those used in spinal surgery. It also has a training center for surgeons who will use the devices.
How the acquisition will affect employees in Gunbarrel and Louisville has not been released.
The new company will be called Medtronic plc. It will have its principal executive offices in Ireland, where Covidien has its current headquarters and corporate taxes are lower. Both companies have a longstanding presence there.
Medtronic plc will be led by Omar Ishrak, the current chairman and chief executive of Medtronic. It will continue to have its operational headquarters in Minneapolis, where Medtronic currently employs more than 8,000 people.
The combined company will have 87,000 employees in more than 150 countries.
According to a joint press statement, the combination with Covidien supports and accelerates Medtronic’s three fundamental strategies: Therapy innovation, expanding its presence around the globe, and producing economic value for patients and stockholders
Medtronic said it will commit to $10 billion in technology investments over the next 10 years in areas such as early stage venture-capital investments, acquisitions and research and development in the United States, above and beyond Medtronic and Covidien’s existing plans.
“The medical technology industry is critical to the U.S. economy, and we will continue to invest and innovate and create well-paying jobs,” Ishrak said.