Medtronic 2016 Annual Report Download - page 81

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Table of Contents
Medtronic plc
Notes to Consolidated Financial Statements (Continued)
78
close of the transaction), former Medtronic, Inc. and Covidien shareholders held approximately 69 percent and 31 percent,
respectively, of the Company's ordinary shares after giving effect to the acquisition.
Covidien is a global leader in the development, manufacture, and sale of healthcare products for use in clinical and home settings.
The operating results for Covidien are included in the Minimally Invasive Therapies Group, Cardiac and Vascular Group and
Restorative Therapies Group segments.
Fair Value of Consideration Transferred
Total consideration was $50.0 billion, consisting of $16.0 billion cash and $34.0 billion of non-cash consideration. Total
consideration is comprised of the equity value of the shares that were outstanding as of January 23, 2015 and the portion of
Covidien's share awards and share options earned as of January 23, 2015 ($559 million). Share awards and share options not earned
($496 million) as of January 23, 2015 will be expensed over the remaining future vesting period, including $189 million and $70
million recognized in acquisition-related items and restructuring charges, net, respectively, for the fiscal year ended April 24,
2015. Share award and share options of $58 million and $18 million were recognized in acquisition-related items and restructuring
charges, net, respectively, for the fiscal year ended April 29, 2016.
The following table summarizes the total fair value of consideration transferred:
(in millions, except per share data)
Cash consideration paid to Covidien shareholders ($35.19 per share) $ 15,994
Cash consideration paid for vested Covidien share awards ($35.19 per share) 33
Total cash consideration $ 16,027
Covidien shares outstanding as of January 23, 2015 455
Exchange ratio per share 0.956
Total Medtronic shares issued to Covidien shareholders(1) 435
Medtronic per share value as of January 23, 2015 $ 76.95
Fair value of Medtronic shares issued to Covidien shareholders $ 33,435
Fair value of shares issued to Covidien share award holders(1) 70
Fair value of share options and awards issued to Covidien share option and award holders 456
Total fair value of consideration transferred $ 49,988
(1) 1 million ordinary shares were issued, net, to Covidien share award holders.
Fair Value of Assets Acquired and Liabilities Assumed
The Company accounted for the acquisition of Covidien as a business combination using the acquisition method of accounting.
The assets acquired and liabilities assumed were recorded at their respective fair values as of the Acquisition Date. The fair value
of assets acquired and liabilities assumed was finalized during the third quarter of fiscal year 2016. During the measurement period,
which ended January 26, 2016, adjustments were made to finalize Covidien's preliminary fair value estimates related primarily to
other current assets, intangible assets, goodwill, certain property value, contingent liabilities and the related deferred tax impacts.
Based upon the acquisition valuation, the Company acquired $18.3 billion of customer-related intangible assets, $7.1 billion of
technology-based intangible assets, $430 million of tradenames, with weighted average estimated useful lives of 18, 16, and 6
years, respectively, $420 million of IPR&D, and $30.0 billion of goodwill.