Medtronic to takeover Smith & Nephew rumour

Bloomberg has reported that medical device maker Medtronic is looking at a takeover of London-based Smith & Nephew. It is said that the move that could help the company reduce its lower its taxes by moving its base overseas. Medtronic has not commented on the report.

The Financial Times reported last week that Stryker Corp had been making a bid for Smith & Nephew, which also makes medical equipment. Stryker denied the report.

According to Bloomberg, on Wednesday, Smith & Nephew shares rose 3.3% to close at 1,064 pence in London.

Medtronic shares were up 4% in New York.

Mick Cooper, analyst at Edison Investment Research, said: “The benefits of tax inversion appear to be a key driver of the apparent interest in Smith & Nephew by Medtronic and Stryker, as it was for Pfizer with AstraZeneca.

There would also be a solid strategic rationale for a deal with either company, but given Smith & Nephew’s impressive development under Oliver Bohuon, a material premium would need to be offered by any potential bidder.”