The deal, which has been approved by both boards of directors, values Covidien at $93.22 a share, 29% above its closing price on Friday. Of that, Covidien shareholders will get $35.19 in cash and the rest in Medtronic shares. It will create a new global healthcare giant with 87,000 employees in 150 countries, making it a potent rival to industry leader Johnson & Johnson Co (JNJ).

Scale was an important consideration in closing the deal, said Covidien CEO Jose Almeida in a joint conference call Monday.

“This gives us the collective financial strength to go in and come up with longterm contracts and some level of risk sharing with hospitals. Not many out there in healthcare can come up with proposals like this,” said Almeida. The combined company creates “a force multiplier that we could not replicate on our own.”

As with a number of other recent deals, Medtronic will relocate its headquarters to Ireland, where it will enjoy a lower rate of tax on its profits–12.5%–than it currently does in Minneapolis. That maneuver, known as ‘inversion’, has become a central and controversial part of U.S. companies’ M&A strategy in recent years. Inversions could be banned by the new budget that President Barack Obama’s administration sent to Congress in March but, in the short term, companies appear to be rushing to do such deals while they still can.

In a move apparently aimed at pre-empting criticism of the inversion, Medtronic announced that the combined company would commit to an extra $10 billion in U.S. technology investments over the next 10 years “in areas such as early stage venture capital investments, acquisitions and R&D”,  above and beyond the two companies’ existing plans. It also said it would keep its operational HQ in Minneapolis, where it currently employs 8,000 people. It didn’t say how many jobs might be cut there.

Medtronic said that the deal would immediately add to earnings per share, and would generate $850 million in pre-tax cost savings by its fiscal 2018 year, mainly through streamlining administrative and supply-chain infrastructures.

Medtronic is the world’s biggest standalone maker of medical devices, ranging from pacemakers to spinal implants and insulin pumps. Covidien, which was previously the healthcare unit of Tyco, makes a broad range of surgical and nursing care products. The combined company will be headed by Medtronic’s chief executive Omar Ishrak.  The Financial Times reported Covidien CEO Almeida as saying he would step down once the deal is completed.

The deal will need the approval of regulators in the U.S., the European Union, China and “a number of other countries”, Medtronic said. However, there appear to be few areas where the two companies’ businesses overlap to an extent that would threaten the deal on antitrust grounds.