Former Medtronic CEO: Company should go ahead with Covidien merger

Medtromic's 'Rising Man' symbol
The "Rising Man" symbol stands in front of the Fridley, Minn., based Medtronic.
Jim Mone/Associated Press

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.

"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.

Your support matters.

You make MPR News possible. Individual donations are behind the clarity in coverage from our reporters across the state, stories that connect us, and conversations that provide perspectives. Help ensure MPR remains a resource that brings Minnesotans together.