Covidien Buys ev3 For $2.6 Billion

NEW YORK (TheStreet) -- Covidien(COV) announced an agreement Tuesday to buy all of ev3's(EVVV) outstanding shares for $2.6 billion, or $22.50 a share, in cash.

The transaction will take the form of an all-cash tender offer by a wholly owned subsidiary of Covidien, followed by a second-step merger expected to be completed by July 31.

On a non-GAAP basis, Covidien expects this transaction to dilute fiscal 2010 earnings per share by 5 cents to 8 cents. Covidien expects fiscal 2011 non-GAAP earnings per share to be diluted by about 10 cents to 15 cents.

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The combination is expected to be accretive to both revenue and earnings growth rates.

Covidien says that ev3's expertise and product portfolio will help the former expand its vascular intervention products.

-- Reported by Andrea Tse in New York

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