According to the Minneapolis/St. Paul Business Journal, Medtronic may ask to cut it's $43 billion offer to acquire Covidien after new Treasury Department regulations were introduced to stymie tax-inversion deals.
The new proposed regulations would impose additional financing costs on companies moving their headquarters overseas after an acquisition deal, which Medtronic announced it would do when the Covidien acquisition was complete. Covidien is based in Ireland, where taxes would be less burdensome for the device company giant.
The new regulations would make the Medtronic-Covidien deal more expensive and wouldn't allow Medtronic to finance the acquisition with overseas cash. However, the company could raise debt to fund the deal or pull out and pay an $850 million fine, as noted in the deal.
An unidentified source in the Business Journal report said the company "may restructure the deal to include more stock and less cash." However, the report also noted these changes won't likely "kill the acquisition."
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