The High Court of Ireland has approved Medtronic’s roughly $48 billion deal to buy surgical supplier Covidien — one of the last steps before the deal becomes official.
The acquisition will transform both companies. Medtronic, whose executive offices are in Fridley, Minn., will become a global maker of health-care goods with $27 billion in revenue and a combined 85,000 employees.
The legal headquarters of the combined company will move to lower-tax Ireland. Medtronic will make space in an organizational chart heavy on heart devices and restorative therapies for a fourth division, which will handle sales of Covidien’s surgical and general health-care supplies.
Early Monday morning, the Irish High Court sanctioned the sale of Covidien to Medtronic. The approval was necessary because Covidien’s legal headquarters are already in Dublin, even though its operating headquarters are in the Boston metro area.
Some of those Boston jobs may migrate to the Minnesota region, as the combined company will keep its executive offices in the Minneapolis suburb of Fridley. The combined company has pledged to increase its number of jobs in Minnesota by at least 1,000 positions, in addition to investing $10 billion in U.S. businesses in the coming decade.
The move will allow both companies to cut costs as they strive to find the kinds of corporate synergies that drive many mergers. Medtronic officials have estimated that they can cut back office expenses and close redundant operations to save $850 million a year, though it will take three years of work to get there.
Medtronic will also benefit from tax changes moving forward. Although its global tax rate will only move down a point or two from what it pays today, the new company will be able to spend about 60 percent of its cash flow without facing U.S. repatriation taxes on the money. Today, the figure is 33 percent for Medtronic.
Repatriation taxes are intended to kick in when a U.S.-based company brings home foreign-earned profits that have not been subject to the country’s corporate-tax rate.
The deal was expected to become official after U.S. markets closed on Monday. Under the deal, Medtronic PLC, based in Ireland, will become the parent company of both Medtronic Inc. and Covidien PLC, issuing new stock under the old Medtronic ticker symbol, MDT.