Cardinal Health to buy Medtronic units for $6.1 bn

Medtronic’s Tullamore plant will be one of 17 company facilities changing hands as a result of the $6.1 billion deal. The company currently employs around 350 staff, including contractors, at the Tullamore plant following a restructuring last year. Staff were being briefed today about the transaction.

The medical supplies business was a legacy operation of Covidien, which was acquired by Medtronic for $49.9 billion in January 2015 in a move which gave the world’s largest medical device maker Irish domicile.

The business sells everything from needles and catheters to monitoring equipment and medical instruments. Cardinal, based in Dublin, Ohio, said in a statement it was acquiring the patient care, deep vein thrombosis and nutritional insufficiency units from Medtronic.

It said the businesses accounted for 23 product categories with sales across global markets. The US company already has a strong medical products division. Medtronic said the units being sold had reported sales of $2.4 billion over the past year.

The sale marks the culmination of a process which began at the start of the year. Cardinal had been considered the front-runner for the business since bids were submitted last month and had been in exclusive talks with Medtronic for the last couple of weeks. The price agreed is ahead of earlier projections, which were in the region of $5 billion.

Following the sale, Medtronic will continue to employ more than 3,500 people in Ireland, with plants in Galway, Athlone and Dublin, the company said.

“This is a positive transaction for all involved – Medtronic, Cardinal Health, and our respective shareholders and employees – who we believe will all thrive under this change in ownership,” said Omar Ishrak, Medtronic chairman and chief executive.

Portfolio management

“In addition, it signifies our commitment to disciplined portfolio management. Ultimately, we came to the conclusion that these products – while truly meaningful to patients in need – are best suited under ownership that can provide the investment and focus that these businesses require.”