The St. Louis Post-Dispatch reported two Republican lawmakers are profiting from Medtronic's acquisition of Covidien and subsequent headquarters move from Minnesota to Ireland in a tax inversion strategy.
Both U.S. Speaker of the House John Boehner and Ways and means Committee Chairman David Camp are not cracking down on U.S. companies acquiring overseas companies and then relocating overseas for lower tax rates. In fact, both have made money off at least one of the deals, according to the report. They both hold Medtronic shares and Rep. Camp purchased additional shares after the transaction was announced.
Additionally, both Congressmen sold between $15,000 and $50,000 Covidien shares in June, although both maintain they are not involved in the day-to-day investment decisions.
President Barack Obama put forth a proposal for a retroactive law that would penalize companies for tax inversion strategies — which would include the Medtronic-Covidien deal if it's approved. The acquisition is expected to be approved by the end of 2014 or beginning of 2015, although the companies face challenges from both boards of directors.
Medtronic CEO Omar Ishrak reiterated the company's commitment to acquiring Covidien and moving headquarters overseas; in the most recent financial report, Mr. Ishrak even outlined why the move is good for the United States economy.
Yesterday Medtronic also acquired Sapiens Steering Brain Stimulation for $200 million and today announced the acquisition of another company, NGC Medical, today. In the first quarter of the 2015 fiscal year, the company reported revenue up slightly from the same period last year, to $4.2 billion, although spine revenue continues to spiral downward and BMP revenue declined 11 percent.
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