Covidien (Hamilton, Bermuda) reported that its board has unanimously approved of moving the company's principal executive office from Bermuda to Ireland. It said that the move is part of a reorganization that will create a newly formed Irish company, also called Covidien.
The first step in this reorganization is the establishment of Covidien's tax residency in Ireland later this month. Covidien shareholders then will be asked to vote in favor of completing the reorganization at a shareholders meeting. If conditions are satisfied, including approval by Covidien's shareholders and the Supreme Court of Bermuda, Covidien plc then will replace Covidien Ltd. as the ultimate parent company.
The company said that there will be no changes in its U.S. operations or workforce.
Richard Meelia, president/CEO of Covidien said that the decision to move to Ireland was made "after an extensive analysis of several possible alternatives. He said that incorporation in Ireland "will offer increased strategic flexibility and operational benefits as we continue to expand the rapidly growing international portion of our business."
In a statement, the company said that Ireland "has a stable economic, legal and regulatory environment and enjoys strong relationships as a member of the European Union." It also cited the country's "long history of international investment and a good network of tax treaties with the U.S., the European Union and several other countries where Covidien has major operations."
Covidien has had operations in Ireland for nearly 30 years. It has five factories serving the Medical Devices and Imaging Solutions segments, as well as sales and customer service facilities and a total of almost 2,000 employees in the country.
It said it does not expect the reorganization to have material impact on its financial results.