Monday, August 11 12:17:55
US Federal antitrust regulators have asked for more information on medical device giant Medtronic's plan to buy Irish domiciled company Covidien, raising the possibility the $42.9 billion acquisition could be delayed.
The news comes after US President Obama singled out Ireland as a destination for US capital through the so-called tax inversion scheme.
In a regulatory filing, Medtronic said the Federal Trade Commission wanted "additional information and documentary material" on the proposed deal. The move extends the waiting period for the agency's antitrust review until 30 days after the parties have complied with the FTC's request.
The filing did not indicate what information the regulators are seeking beyond what was submitted when the companies initially gave notice of their intent to merge. The terms of the deal include plans for Medtronic to move its headquarters to Ireland, where Covidien is based for tax purposes, in a so-called inversion meant to lower Medtronic's corporate tax rate.
That practice, which has become increasingly popular among life sciences companies, has come under intense scrutiny in Washington, where Obama administration officials and members of Congress have been considering ways to halt the exodus.
Last month, US drug maker AbbVie said it would pay nearly $55 billion for Lexington biotech Shire PLC, another Massachusetts company with an Irish address, and also planned an inversion.
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