Smith & Nephew: Summer Street comments on potential Stryker (SYK)-SNN deal in light of evolving inversion news; maintain Buy
Summer Street notes, in light of the evolving inversion news, firm reminds clients that it has never viewed a potential SYK-SNN as an inversion deal - it would be a strategic deal ala ZMH-Biomet. Specifically, SNN has a reasonably high tax rate with a majority of sales in the US and taxed in the US. Lastly, firm views pending MDT-COV as an inversion deal first and foremost. Firm strongly believes both SYK and MDT should have an interest in SNN for expanding sales and manufacturing prescences in the BRICS. Firm now feels most of the SNN acquisition premium is out of the stock.