NEW YORK (TheStreet) -- Shares of Medtronic Inc. (MDT) are up 9.64% to $66.55 in pre-market trade as the medical devices company agreed to buy Covidien Plc (COV) for $42.9 billion in cash and stock as it transforms into a broader-based company bolstered by new tax advantages, Bloomberg reports
Medtronic will pay the equivalent of $93.22 for each share of Dublin-based Covidien, or about 29% more than Covidien's New York closing price of $72.02 on June 13, the companies said yesterday in a statement.
The combined company, called Medtronic Plc, will be based for tax purposes in Ireland, Bloomberg said.
TheStreet Ratings team rates MEDTRONIC INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate MEDTRONIC INC (MDT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."