Medtronic PLC said Wednesday it doesn't appear the U.S. government's new rules designed to thwart so-called corporate inversions, when companies move out of the U.S. to save on taxes, will affect it.
The company, which has its operational headquarters in Fridley, is one of the biggest American businesses to make such a move. In January 2015, it completed the purchase of a Ireland-based maker of medical devices, allowing it to shift its legal headquarters to Dublin and allocate overseas-held cash without facing U.S. repatriation taxes.
Medtronic has since said it's been able to tap $9.3 billion previously held in overseas operations for general corporate purposes. The company announced a $5 billion stock buyback in January.
Deals that lead to inversions broadly allow companies to keep access to U.S. employees and customers while avoiding parts of the U.S. tax code. President Obama on Tuesday called mergers that result in tax inversions "one of the most insidious tax loopholes out there, fleeing the country just to get out of paying their taxes."
On Monday, the Treasury Department unveiled rules that redefined how it classified the size of an overseas company being acquired by a U.S. firm. In doing so, it raised targeted repeat users of the inversion process and made U.S. companies that try to merge with overseas companies more susceptible to existing law that says if shareholders of the former U.S. company own at least 80 percent of the combined firm, the combined business is still subject to U.S. tax law.
The change led New York-based Pfizer Inc. to call off its $160 billion merger with Allergan, a now Ireland-based firm that has already gone through several inversions.
In a statement, Medtronic said its preliminary review of the new rules showed they "do not have a material financial impact on any transaction undertaken by the company."
The company repeated its stance that its $49.9 billion acquisition of Irish-based Covidien "was undertaken for strategic reasons."
