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Monday, June 16, 2014

Medtronic, Covidien match up on services strategy before deal, (NYSE: COV), (NYSE: MDT)

Well before Medtronic Inc and Covidien Plc announced their $43 billion merger, the two medical device makers had reached common conclusions about how they needed to change. Their hospital customers, under pressure from government payment cuts and patients struggling to pay or simply staying away, are slashing budgets and taking a harder line on prices, from rubber gloves to heart stents. By 2007, medical device sales had slowed dramatically from double-digit percentage growth to the low-single-digits, and hopes for a rebound have since faded.U.S.-based Medtronic on Sunday said it would purchase Covidien and moving its executive headquarters to Ireland to take advantage of lower corporate tax rates.The combination of their product lines will make them a leader in six out of the top 10 hospital purchasing categories. Medtronic hopes that will add to its leverage in device sales as hospitals narrow down the number of vendors they buy from.In interviews with Reuters in recent weeks, executives from both companies said they were also focused on providing more advisory services to hospitals, suggesting how doctors could save money and improve care with data on standardizing surgical procedures and management of chronic disease.

Covidien Public Limited Company is engaged in the development, manufacture and sale of healthcare products for use in clinical and home settings. Shares of COV traded higher by 20.45% or $14.73/share to $86.75. In the past year, the shares have traded as low as $53.05 and as high as $73.80. On average, 1943330 shares of COV exchange hands on a given day and today's volume is recorded at 68099024.

Medtronic, Inc. (Medtronic) is engaged in medical technology - alleviating pain, restoring health, and extending life for millions of people worldwide. Shares of MDT fell by 1.1% or $-0.67/share to $60.03. In the past year, the shares have traded as low as $51.06 and as high as $64.33. On average, 4298760 shares of MDT exchange hands on a given day and today's volume is recorded at 65437788.



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