Ireland-based Covidien has announced a definitive agreement to acquire Israel-based Given Imaging for a total of approximately $860m.

Pursuant to the terms of the agreement, Covidien will acquire all of the outstanding shares of Given Imaging for $30.00 per share in cash, for a total of approximately $860m, net of cash and investments acquired.

Subject to satisfaction of certain closing conditions and receipt of certain regulatory approvals, the transaction is expected to be completed by the end of March 2014. The transaction is yet to receive Given Imaging shareholder approval.

This transaction has received approval from the boards of directors of both Covidien and Given Imaging.

Given Imaging president and CEO Homi Shamir noted the company revolutionized gastrointestinal (GI) diagnostics over 12 years ago with the launch of PillCam and created an entirely new diagnostic category — capsule endoscopy.

"The combination of Covidien’s established global presence and Given Imaging’s innovative capabilities has the potential to transform this market. After thoroughly evaluating our strategic options we determined that this transaction is in the best interests of Given Imaging, its shareholders and employees and provides unique benefits to patients globally," Shamir added.

This acquisition provides Covidien additional scale and scope to serve the global GI market and also supports the company’s strategy to comprehensively address key global specialties and procedures.