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Medtronic CEO: Covidien Merger Has Accelerated Growth Strategy

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Medical devices company Medtronic, Inc. (NYSE: MDT) recently got approval from an Irish court for its acquisition of Covidien plc (NYSE: COV), which paves the way for Medtronic to be an Ireland-domiciled company. Omar Ishrak, Medtronic chairman and CEO, was on CNBC Tuesday to discuss the company’s strategic plan behind the Covidien acquisition.

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“The strategic benefits of what we are doing [are] so compelling that we felt we can absorb the penalty [...] that the new regulations put out,” Ishrak said.

“We have had a growth strategy that’s been consistent over the last three years, which is around therapy innovation, globalization and economic value, and that strategy hasn’t changed. The Covidien merger has only accelerated that strategy, and so that’s where the deal model for [lite] was based on and that may change.”

Integration With Covidien

“We never underestimate the challenge of doing something this big,” Ishrak said. “So, we treat that with respect, but at the same time here [are] two companies who both have strategic plans that are quite similar, go on the mid-single digits, deriving revenue from different sources.”

“So, we feel preserving the strategic plans of both companies short-term, intermediate-term and long-term is really one of the keys to integration.”

Highest Priority

He continued, “To make sure that the focus that these companies have and the individuals have and individual physicians and customers and stays market leaders in their individual segments is the most important priority.”

“If we simply maintain that through the integration process, the diversification in the revenue that we will get from these two companies will make this into a $27 to $30 billion company going in the mid-single digits, which we think is a worthy goal.”

 

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Posted-In: CNBC ireland Omar IshrakMedia