MEDTRONIC INC
8-K, 1999-08-27
ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS
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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM 8-K


                                 CURRENT REPORT
                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


        Date of Report (Date of earliest event reported): August 27, 1999


                                 Medtronic, Inc.
             (Exact name of Registrant as Specified in its Charter)


                                    Minnesota
                 (State or Other Jurisdiction of Incorporation)



         1-7707                                              41-0793183
(Commission File Number)                                    (IRS Employer
                                                           Identification No.)


                            7000 Central Avenue N.E.
                        Minneapolis, Minnesota 55432-3576
              (Address of Principal Executive Offices and Zip Code)


                                 (612) 514-4000
              (Registrant's telephone number, including area code)



                                 Not Applicable
          (Former Name or Former Address, if Changed Since Last Report)



<PAGE>


Item 5.  Other Events

         On August 27, 1999, the Registrant issued a press release announcing
the signing of a merger agreement to acquire Xomed Surgical Products, Inc..
Subject to the terms and conditions of the merger agreement, shares of Xomed
will be converted into shares of the Registrant pursuant to the conversion ratio
set forth therein and described in the press release. There are outstanding
approximately 12.3 million Xomed shares and options to acquire approximately 1.7
million Xomed shares. The full text of the press release is set forth in Exhibit
99 attached hereto and is incorporated in this Report as if fully set forth
herein.


Item 7.  Financial Statements and Exhibits

         Exhibit 99 Press release dated August 27, 1999.


                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                      MEDTRONIC, INC.



                                      By   /s/ Arthur D. Collins, Jr.
Date:  August 27, 1999                     Arthur D. Collins. Jr.
                                           President and Chief Operating Officer





<PAGE>


                                  EXHIBIT INDEX

                                 Medtronic, Inc.
                             Form 8-K Current Report
                              Dated August 27, 1999




Exhibit Number             Description

       99                  Press release dated August 27, 1999






                                                                    Exhibit 99



                               Contacts:
                               Xomed:                      Medtronic:
                               Thomas E. Timbie            Rachael Scherer
                               Chief Financial Officer     Investor Relations
                               904/332-2452                612/514-4971

                                                           Diana Campau
                                                           612/514-4920
                                                           Pager: 888/790-0650

                                                           Jessica Stoltenberg
                                                           612/514-3333
                                                           Pager: 888/731-6434

F O R   I M M E D I A T E   R E L E A S E

                         MEDTRONIC TO MERGE WITH XOMED,
                      WORLD LEADER IN TECHNOLOGIES TO TREAT
                         EAR, NOSE AND THROAT CONDITIONS

         MINNEAPOLIS, MN, and JACKSONVILLE, FL -- August 27, 1999 -- Medtronic,
Inc. (NYSE: MDT), and Xomed Surgical Products, Inc. (NASDAQ: XOMD), today
announced that they have signed a merger agreement under which Medtronic will
acquire all shares of Xomed, the world's leading provider of surgical products
used by ear, nose and throat surgeons. The merger would establish Medtronic as
the global leader in the market for medical problems in the ear, nose and throat
(ENT).

         The agreement calls for a pooling of interests transaction valued at
approximately $800 million with Xomed shareholders to receive $60.00 in the form
of Medtronic stock for each share of Xomed they now hold. The agreement is
subject to certain collar provisions.

         "Medtronic's merger with Xomed is another important step in our
strategy to build a broad base of market leading franchises, supported by the
full breadth of our technology," said William W. George, Medtronic's chairman
and chief executive officer. "Xomed is an exceptional company which is the clear
market and technology leader in the growing, yet underserved ENT industry. Xomed
is growing rapidly by broadening its product offerings, and will contribute
significantly to Medtronic's continuing growth in revenues and earnings."

         "Xomed's market leadership, strong clinical relationships, highly
regarded management and full range of products offer Medtronic a new platform
for continuing growth beyond our current franchises in cardiac rhythm
management, cardiac surgery, vascular and neurological and spinal," George said.


<PAGE>

         James T. Treace, Xomed chairman and chief executive officer, will lead
Medtronic Xomed, based in Jacksonville, FL. Xomed has 700 employees worldwide,
with manufacturing locations in Jacksonville, Mystic, CT; and St. Aubin le
Monial, France. Distribution is managed by a direct sales organization of 100
representatives and a network of more than 130 distributors worldwide.

         Treace said a merger with Medtronic would spur Xomed to its next growth
level. "Both companies have products and technologies that are highly
complementary, particularly in the area of image-guided surgery. I believe
customers, employees and shareholders of both organizations will benefit
meaningfully from this combination."

         When merged, Treace will report directly to Art Collins, Medtronic
president and chief operating officer. "Xomed continues to introduce new
technologies that will facilitate minimally invasive procedures in the ENT
market in a field where many surgical techniques have remained unchanged for
many years," Collins said. "The company is dramatically changing the way ENT
medical procedures are performed by replacing highly invasive procedures with
new minimally invasive instruments and techniques."

         "There are also opportunities to use Xomed's clinical relationships to
develop and market new products incorporating Medtronic's significant core
technologies. The company is committed to creating synergies and efficiencies
between Medtronic and Xomed to ensure continuation of its leadership position,"
said Collins.

         Xomed is the world's leading provider of surgical devices used by ENT
physicians. The company's products are designed to treat:

         o        Sinus and rhinology conditions such as diseases, infections,
                  malformations and inflammations of the sinuses. Chronic
                  sinusitis affects more than 35 million people or about 15
                  percent of Americans each year and results in 15 million
                  physician office visits. Xomed products include the XPS(R)
                  shaver systems for removing hard and soft tissue; sinus stents
                  and catheters; disposable sinus packing materials; endoscopes;
                  LandmarXTM image guidance systems and other specialized
                  instruments.

         o        Otological conditions such as infections, diseases or
                  malformations of the middle ear. Middle-ear infections are the
                  leading cause of physician visits in children. Xomed products
                  include the ActiventTM anti-microbial and other myringotomy
                  tubes for ventilation of ear infections, middle ear prostheses
                  and powered and manual instruments.

         o        Other head and neck conditions such as infections of tonsils
                  and adenoids, laryngeal and facial lesions, facial and
                  skull-based tumors and obstructions of the throat and airway
                  that cause such problems as sleep apnea. Products include
                  Powerforma(TM) and XPS 2000 surgical drills, the NIM(R) nerve
                  integrity monitoring system and plastic surgery instruments.

         The $60.00 per share acquisition price stated above applies if
Medtronic's average common stock price for the 10 NYSE trading days ending on
and including the third NYSE trading day preceding the Xomed's shareholders'
meeting on the merger is between $66.60 and $81.40 per share. If such average
Medtronic stock price is equal to or greater than $81.40 then each Xomed share
will be exchanged for 0.73710 Medtronic shares, and if it is equal to or less
than $66.60 then each Xomed share will be exchanged for 0.90090 Medtronic
shares. References to Medtronic share amounts and prices do not reflect the
two-for-one stock split effective on September 24, 1999.

         The transaction is subject to customary conditions, including approval
by shareholders of Xomed and Hart-Scott-Rodino clearance. The companies expect
the transaction to be completed before the end of 1999.

         Medtronic, Inc., headquartered in Minneapolis, is the world's leading
medical technology company, specializing in implantable and interventional
therapies that restore health, extend life and alleviate pain.
Its Internet address is www.medtronic.com.

         Xomed Surgical Products, Inc., is a leading developer, manufacturer and
marketer of surgical products for use by ENT physicians. The company offers a
broad line of products in its ENT market that include powered tissue-removal
systems, nerve monitoring systems, disposable fluid-control products, image
guided surgery systems and bioabsorbable products. Xomed's Internet address is
www.xomed.com.

                                       -0-

Any statements made about the company's anticipated financial results and
regulatory approvals are forward-looking statement subject to risks and
uncertainties such as those described in the company's Annual Report on Form 10K
for the year ended April 30, 1999. Actual results may differ materially from
anticipated results.




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