Medtronic Inc. is evaluating a takeover of London-based Smith & Nephew PLC that could see the Fridley-based medical-device maker move its tax domicile overseas, people familiar with the matter said.

Smith & Nephew, with a market value of about $15.9 billion, is aware of Medtronic’s interest, as are investment banks, said two of the people, asking not to be named discussing a private matter. Medtronic’s preparations for a bid are at an early stage, and no offer is imminent, the people said.

Medtronic is a more serious bidder for Smith & Nephew than Stryker Corp., another U.S. maker of medical devices, said one of the people. Last week, in response to a Financial Times report, Stryker Chief Executive Kevin Lobo said the company was in the early stages of evaluating a bid.

The largest medical-device companies are banding together to compete as hospitals cut costs to accommodate price pressure resulting from the Affordable Care Act. Medical centers are looking for only a handful of companies to provide a wide range of products, and the leaders of both Medtronic and Johnson & Johnson have said they are looking for scale and planning to bundle their device offerings.

Medtronic shares rose 3.6 percent Wednesday to close at $63.22, while Smith & Nephew’s U.S.-traded shares climbed 12 percent. In U.K. trading, the stock closed up 3.3 percent. With a market value of more than $63 billion, Medtronic had $14.2 billion in cash and equivalents at the end of April, data compiled by Bloomberg show.

Spokesmen for Medtronic and Smith & Nephew declined to comment.

The transaction would probably be structured as a tax inversion, with Medtronic using Smith & Nephew’s corporate shell to move its legal residence to the U.K., the people said. The gap between the 35 percent federal tax rate and much lower levies in some European countries is spurring such deals — including Pfizer Inc.’s now-shelved effort to acquire AstraZeneca PLC. The U.K. has a 21 percent corporate income tax rate.

Medtronic’s chief executive, Omar Ishrak, has said he wouldn’t rule out a tax-inversion deal.

“Strategically, we do have this current problem that we have a lot of cash outside the U.S.,” he said in an interview last month. “We encourage some kind of U.S. tax reform that allows us access to that cash in a more reasonable way.”