Covidien plc Deals Free Up 25% More Cash, Says Medtronic, Inc. CFO

Medtronic (NYSE:MDT) CFO Gary Ellis told analysts during a conference call today that the recently closed $50 billion acquisition of Covidien frees up 25% more cash for the combined entity.

"About 35% of Medtronic legacy cash flow was in effect available and 65% was in effect unavailable for use in the U.S.," Ellis said during the call to discuss Medtronic's fiscal 3rd-quarter results.

The Covidien deal, which gives Medtronic an Irish corporate domicile, means "basically about 60% of the combined company will have cash that is un-trapped and available going forward," Ellis said, noting that he expects the new Medtronic to throw off about $7 billion a year in free cash flow.

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