Sector News

Medtronic looks to sell $5B medical supplies biz

February 1, 2017
Life sciences

Medtronic logoMedtronic is working with advisors for a possible sale of its medical supplies business, according to a Bloomberg report.

The process is reportedly in an early stage, but the Fridley, Minn.-based company has been looking for prospective buyers for the division, which could be worth $5 billion.

Medtronic shares had a positive day, up 1.8% to close at $76.02.

Earlier this month, the U.S. Internal Revenue Service reportedly agreed to drastically slash the amount it claims Medtronic (NYSE:MDT) owes on loans between its subsidiaries, from a potential $1.36 billion to just $14 million.

Last summer, a federal tax judge found for the Fridley, Minn.-based company in its lawsuit against the IRS over the dispute, which involves “transfer pricing” among the company’s various units during the tax years 2005 and 2006. The tax bureau claimed Medtronic owed income tax of $548.2 million for 2005 and $810.3 million for 2006; the company disputed the bill and took the case to the U.S. Tax Court. Judge Kathleen Kerrigan found in June that Medtronic proved that the IRS was “arbitrary, capricious, or unreasonable” in its interpretation of the transfer pricing for its Puerto Rico subsidiary.

In transfer pricing, income is allocated among branches in different countries. It’s a legal tax maneuver companies can use to attribute profits from a product made and sold in the U.S. to a unit in a foreign country. If Kerrigan’s ruling had gone the other way, the IRS could have dunned Medtronic for extra taxes from 2007 on. Medtronic has said it expects to repatriate between $500 million and $4.5 billion in overseas cash once the dispute is put to bed.

This month the revenuers agreed to use a much smaller figure, $38.9 million, to calculate what Medtronic owes on transfer pricing for 2005 and 2006 combined. That means a tax tab of just $14 million, according to

By Fink Densford

Source: Mass Device

comments closed

Related News

October 2, 2022

GSK names Julie Brown, a 25-year AstraZeneca veteran, its first woman CFO

Life sciences

Five years ago, GSK made headlines when it hired Emma Walmsley to become the first woman to run a major pharmaceutical company. Now the Big Pharma has brought in another woman to control the company’s finances. Julie Brown will be GSK’s next chief financial officer. Brown, currently the chief operating and financial officer at fashion and beauty brand Burberry Group, is set to replace Iain Mackay.

October 2, 2022

Moderna creates new launch preparation role, poaches Novartis exec as manufacturing lead

Life sciences

Moderna created a new role responsible for “building out the company’s organization to support its growing pipeline.” Starting first thing 2023, Juan Andres, Moderna’s manufacturing head, will step into this new role under the title president of strategic partnerships and enterprise expansion, the company said Thursday.

October 2, 2022

Torrent Pharma to acquire Curatio for $245.16m

Life sciences

The latest takeover is anticipated to boost the presence of Torrent in the dermatology segment. Indian company Torrent Pharmaceuticals has signed a definitive agreement for the complete acquisition of Curatio Healthcare for $245.16m (Rs20bn).