Former Medtronic CEO: Company should go ahead with Covidien merger
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Former Medtronic CEO Bill George says he hopes the company will proceed with its controversial merger with Ireland-based Covidien.
The deal is subject to new U.S. Treasury department rules designed to make so-called tax inversion deals less financially attractive. Medtronic says it's studying the provisions.
The company would have to pay Covidien a so-called "break-up fee" of up to $850 million if Medtronic backs out.
But George says that won't be a major consideration as Medtronic decides how to proceed.
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"That's 2 percent of the deal, of a $43 billion deal," George said. "The deal is worth a lot more value than that. It's going to produce a lot more profit than that in year one. So I don't think that is going to be the deciding factor here."
Medtronic's share price fell as much as 4 percent Tuesday following the Treasury department's Monday evening announcement of new provisions.
A tax inversion involves a U.S. firm merging with a foreign company, and reducing its US tax bill.
George spoke to The Daily Circuit's Tom Weber.
