Medtronic to use USD 9.3 billion cash for share repurchases and debt repayment
Medtronic executives are mulling over the use of USD 9.3 billion repatriated cash generated by internal reorganization and the tax inversion USD 50 billion acquisition of Covidien. Probably, the money will be used for share repurchases and debt repayment. According to a spokesperson from Medtronic, the company is obligated to return at least 50% of the cash to investors via dividends and share buybacks. The company saved USD 3 billion in taxes by repatriating USD 9.8 billion to the US under a tax rate of 5%. However, the medical device excise tax is estimated to cost the company USD 210 million in 2016. Presently, Medtronic has USD 17.2 billion in cash and investments and USD 35.8 billion in debt. Covidien’s Solitaire stent retriever helped push Medtronic’s neurovascular segment revenues up 32% to USD 143 million.