This article was originally published by TheStreet on June 16, 2014
By Sarfaraz A. Khan
NEW YORK (TheStreet) -- Medtronic (MDT_), the world's second-biggest maker of medical devices, is making the largest acquisition in its history.
Medtronic is buying Irish competitor Covidien (COV_) in a cash and stock deal for $42.9 billion. Medtronic is paying a 29% premium over Covidien's closing price on Friday.
Covidien's shares jumped over 19% on Monday to $86. On the other hand, Medtronic's shares have fallen by 2.9% to around $59.
The deal is good news for Medtronic's shareholders because it allows the company to bring back billions in cash held in overseas markets while avoiding the U.S. corporate tax rate. But while Medtronic is paying a premium, analysts have pointed out that this is not an expensive purchase given the ongoing consolidation in the medical-products industry.
