Medtronic and Covidien announced that they have entered into a definitive agreement under which Medtronic has agreed to acquire Covidien for $42.9 billion.

The combined companies “will provide patients, physicians and hospitals with a compelling portfolio of offerings that will help improve care and surgical performance,” said José E. Almeida, chairman, president and CEO of Covidien. “This transaction provides our shareholders with immediate value and the opportunity to participate in the significant upside potential of the combined organization.”

Commentators emphasized the tax advantages of the deal arising from Covidien’s off-shore incorporation.

article in Wall Street Journal [registration required]