- Medtronic’s $42.9 billion acquisition of Irish devicemaker Covidien last year resulted in an additional cost: Helping to settle a score with the U.S. IRS to the tune of up to $220 million, the Minneapolis/St. Paul Business Journal reported.
- The settlement stems from a dispute between the IRS and Tyco International, which previously owned Covidien.
- After purchasing Covidien, Medtronic moved its headquarters to Ireland where corporate taxes are lower — a move that was blasted by lawmakers.
Tyco agreed to pay the IRS between $475 million and $525 million to settle outstanding taxes under a tax-sharing agreement between Tyco, TE Connectivity and Covidien. In a Jan. 19 regulatory filing with the Securities and Exchange Commission, Medtronic said it is responsible for 42% of that debt.
In the regulatory filing, Medtronic said money had been previously set aside for the settlement so it would avoid recording any charges.
The dispute dates to 2013, when the IRS called Tyco on its failure to pay taxes—in 2007 and earlier—on loans the conglomerate made between foreign business units, the Minneapolis/St. Paul Business Journal reported.