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US-based medical technology firm Medtronic has entered into a definitive agreement to acquire Ireland-based Covidien for $42.9bn.

The cash-and-stock transaction, valued at $93.22 per Covidien share, is subject to certain conditions, including approvals from shareholders of Medtronic and Covidien.

The proposed transaction requires regulatory clearances in the US, EU, China and certain other countries. It is expected to be completed in the fourth quarter of 2014 or early 2015.

According to Medtronic, following completion of the transaction, it will have significantly advanced its position as the world’s premier medical technology and services company.

Once complete, the businesses of Medtronic and Covidien will be combined under a new entity to be called Medtronic plc.

The new entity will have a comprehensive product portfolio, a diversified growth profile and broad geographic reach, with 87,000 employees in more than 150 countries.

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The combination with Covidien supports and accelerates Medtronic’s three fundamental strategies, which include therapy innovation, globalisation and economic value.

Medtronic chairman and CEO Omar Ishrak said: "This acquisition will allow Medtronic to reach more patients, in more ways and in more places.

"Our expertise and portfolio of services will allow us to serve our customers more efficiently and better address the demands of the current healthcare marketplace."

"This acquisition will allow Medtronic to reach more patients."

"We also look forward to welcoming the Covidien team to Medtronic and working together to improve healthcare outcomes globally."

Covidien chairman, president and chief executive officer José Almeida said: "This transaction provides our shareholders with immediate value and the opportunity to participate in the significant upside potential of the combined organisation."

In the transaction, Perella Weinberg Partners served as financial advisor to Medtronic, while Cleary Gottlieb Steen & Hamilton and A & L Goodbody as its legal advisors.

Goldman Sachs acted as financial advisor to Covidien, while Wachtell, Lipton, Rosen & Katz and Arthur Cox served as its legal advisors.

Bank of America Merrill Lynch provided committed financing for the transaction.

Image: Medtronic’s world headquarters in Minneapolis, US. Photo: courtesy of Medtronic Inc.