Biotech Values

[ilpapa]

another tax related deal.

Medical-device maker Medtronic Inc. MDT -0.15% is in advanced talks to combine with rival Covidien COV -0.03% PLC in a deal valued at more than $40 billion, according to people familiar with the matter.

The deal, which could be announced Monday, would be structured as a so-called tax inversion, according to one of the people. In such deals, acquirers buy companies domiciled in countries with lower corporate tax rates than their own as a means of reducing their overall rate. Covidien is based in Ireland, which is known for having a relatively low tax rate: its main corporate tax rate is 12.5%. In the U.S., home to Medtronic, the 35% rate is one of the world's highest.