First Quality to Acquire Covidien's Retail Products Business

    GREAT NECK, N.Y. & HAMILTON, BERMUDA, December 17 /CNW/ - First Quality
Enterprises, Inc. ("First Quality") and Covidien Ltd. (NYSE:   COV, BSX: COV)
today announced that the two companies have entered into a definitive
agreement under which First Quality will acquire Covidien's Retail Products
business for approximately $335 million, subject to certain adjustment
provisions. Covidien's Retail Products business, headquartered in King of
Prussia, Pennsylvania, had sales of $744 million in fiscal 2007. The
transaction, which is subject to customary closing conditions, is expected to
be completed in the first calendar quarter of 2008.

    The First Quality group of companies is comprised of three divisions -
Absorbent Hygiene, Paper Products and Non-woven Material - serving the
healthcare, retail and commercial channels. With the addition of Covidien's
Retail Products business and its complementary product lines, First Quality's
Absorbent Hygiene business will have a more diversified product portfolio and
a full range of adult incontinence, feminine hygiene, wet and dry wipes, and
baby diaper products. This acquisition will enable First Quality to enhance
its relationships with retail customers by offering broader, more innovative
product lines and greater value.

    "The acquisition of Covidien's Retail Products business is a compelling
opportunity for First Quality," said Richard Martorella, Director of Finance
and Treasury of First Quality. "The addition of Retail Products creates a more
comprehensive Absorbent Hygiene business, solidifying First Quality's position
in our three core areas. Together, the First Quality Absorbent Hygiene
division will provide customers with a full suite of premium products serving
the infant care, adult incontinence and feminine hygiene segments. We welcome
Covidien's Retail Products business and its hardworking and dedicated
employees to the First Quality family."

    Richard J. Meelia, President and Chief Executive Officer of Covidien
said, "Retail Products has been part of Covidien for nearly a decade and has a
workforce committed to delivering high-quality products to North American
retailers. Following a thorough review and evaluation of strategic
alternatives for the business, we determined that the unique characteristics
of Retail Products did not fit with Covidien's goal to be the leading global
healthcare products company. This transaction is consistent with Covidien's
strategy to focus its portfolio and reallocate resources to its core
healthcare business. We look forward to working closely with First Quality's
talented team and we anticipate a smooth transition."

    Beginning in the first quarter of fiscal 2008, Covidien will report the
Retail Products business as a discontinued operation.

    Goldman, Sachs & Co. served as financial advisor to First Quality and
Morgan Stanley served as financial advisor to Covidien.


    Founded in 1990, First Quality Enterprises, Inc. and its affiliates are a
closely-held diversified group of companies manufacturing, selling and
distributing branded and private label absorbent hygiene, paper and non-woven
products into the healthcare, retail and commercial channels. First Quality is
dedicated to meeting the demands of the market by providing innovative and
high-quality products manufactured utilizing state of the art technology. For
more information please visit


    Covidien is a leading global healthcare products company that creates
innovative medical solutions for better patient outcomes and delivers value
through clinical leadership and excellence. Covidien manufactures, distributes
and services a diverse range of industry-leading product lines in five
segments: Medical Devices, Pharmaceutical Products, Imaging Solutions, Medical
Supplies and Retail Products. With 2007 revenue of $10 billion, Covidien has
more than 43,000 employees worldwide in 57 countries, and its products are
sold in over 130 countries. Please visit to learn more about
our business.


    Any statements contained in this press release that do not describe
historical facts may constitute forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995. Any
forward-looking statements contained herein are based on our management's
current beliefs and expectations, but are subject to a number of risks,
uncertainties and changes in circumstances, which may cause actual results or
Company actions to differ materially from what is expressed or implied by
these statements. The factors that could cause actual future results to differ
materially from current expectations include, but are not limited to, risks
and uncertainties relating to satisfaction of closing conditions related to
the Retail Products business transaction, the integration of businesses we
have acquired or may acquire in the future, changing technologies, product
development and market acceptance of our products, the cost and pricing of our
products, manufacturing, competition, customers' capital spending and
government funding policies, changes in governmental regulations, the use and
protection of intellectual property rights, litigation and exposure to foreign
currency fluctuations. These and other factors are identified and described in
more detail in our filings with the SEC. We disclaim any obligation to update
these forward-looking statements other than as required by law.

For further information:

For further information: For Covidien Eric Kraus, 508-261-8305 Senior
Vice President Corporate Communications or Coleman
Lannum, CFA, 508-452-4343 Vice President Investor Relations or Bruce Farmer, 508-452-4372 Director Financial
Communications or Wayde McMillan, 508-452-4387
Director Investor Relations or For First Quality
Joele Frank, Wilkinson Brimmer Katcher Matthew Sherman, 212-355-4449 or Joele
Frank, Wilkinson Brimmer Katcher Jennifer Schaefer, 212-355-4449 or Joele
Frank, Wilkinson Brimmer Katcher Marin Kaleya, 212-355-4449

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