Regulatory disclosures show that Medtronic hired a lobbying group that includes Trent Lott, former Senate Majority Leader, and John Breaux, former member of the Senate Finance Committee. Medtronic’s reports indicate that the duo will devote its lobbying effort to "issues regarding acquisition of medical supplies provider Covidien (NYSE:COV)."
Lott and Breaux operate as part of a 5-member team at the Breaux Lott Leadership Group at lobbying giant Patton Boggs. Medtronic hired the team in June, according to the company’s lobbying disclosures.
Lawmakers have had some harsh words for Medtronic and other companies who are using overseas acquisitions to move their headquarters to countries with more favorable corporate tax rates. Various measures have attempted to prohibit so-called ‘corporate inversions’ and to ban inverters from bidding for or winning federal contracts.
Medtronic and Covidien have maintained that their merger isn’t motivated by the inversion, saying that the main drivers are strategic. Morgan Stanley analysts agreed, maintaining that "cash access" is the primary concern for the merger.
"The real purpose of this, in the end, is strategic, both in the intermediate term and the long term," Ishrak told reporters earlier this year. "It is good for the U.S. in that we will make more investment in U.S. technologies, which previously we could not."
The merger will allow Medtronic to tap the billions currently stored outside the U.S. without having to pay U.S. corporate taxes upon repatriation. Covidien moved its headquarters to Ireland in 2009, saying at the time that the company hoped to benefit from the lower corporate tax rate there. Medtronic plans to make the same move once the merger closes later this year or early in 2015.