Cardinal Health to gain Medtronic’s medical products business for $6.1bn

18 April 2017 (Last Updated April 18th, 2017 18:30)

Cardinal Health has signed a definitive $6.1bn agreement to acquire Medtronic's Minimally Invasive Therapies Group’s (MITG) patient care, deep vein thrombosis, and nutritional insufficiency businesses, which are part of the group's patient monitoring and recovery (PMR) division.

Cardinal Health has signed a definitive $6.1bn agreement to acquire Medtronic's Minimally Invasive Therapies Group’s (MITG) patient care, deep vein thrombosis, and nutritional insufficiency businesses, which are part of the group's patient monitoring and recovery (PMR) division. 

In addition to $6.1bn, the agreement includes after-tax proceeds of around $5.5bn. From this, Medtronic plans to use $1bn for repurchasing incremental shares in the next financial year and the remainder going towards reducing debt.

Acquisition includes Medtronic's dental/animal health, chart paper, wound care, incontinence, electrodes, SharpSafety and thermometry. It also includes perinatal protection, blood collection, compression and enteral feeding product lines, alongside 17 associated manufacturing facilities.

Medtronic intends to retain its respiratory and monitoring solutions and renal care solutions businesses under PMR.

Medtronic chairman and chief executive officer Omar Ishrak said: "Medtronic has had a specific focus over the past several years on ensuring that we are delivering compelling clinical and economic value to health systems and patients around the world. 

"We can put these proceeds to work, investing over the long-term in higher returning internal and external opportunities that are more directly aligned with our growth strategies of therapy innovation, globalisation, and economic value."

"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.

"At the same time, we can put these proceeds to work, investing over the long-term in higher returning internal and external opportunities that are more directly aligned with our growth strategies of therapy innovation, globalisation, and economic value."

Cardinal Health offers healthcare services and customised solutions to clinical organisations such as hospitals and health systems.

Subject to customary regulatory approvals and other customary closing conditions, the transaction is expected to be completed in the second quarter of Medtronic's fiscal year 2018.