The board of directors of Covidien, a global provider of healthcare products, has approved the separation of the Pharmaceuticals business from the rest of Covidien.

The separation will occur by means of the declaration of a dividend in specie of the Pharmaceuticals business, to be effected by the transfer of the Pharmaceuticals business from Covidien to Mallinckrodt and the issuance by Mallinckrodt of ordinary shares directly to Covidien's shareholders.

For every eight ordinary shares of Covidien held, Covidien shareholders will receive one ordinary share of Mallinckrodt. No fractional shares of Mallinckrodt will be issued. Shareholders will receive cash in lieu of fractional shares. The distribution is expected to occur on June 28, 2013, to Covidien shareholders of record as of the close of business on June 19, 2013.

After the distribution, Mallinckrodt will be an independent publicly traded company and Covidien will retain no ownership interest in Mallinckrodt. Mallinckrodt ordinary shares are expected to begin "regular way" trading on July 1, 2013, on the New York Stock Exchange (NYSE) under the ticker symbol MNK. Covidien will continue to trade on the NYSE under the ticker symbol COV. Covidien currently expects that "when-issued" trading for both Mallinckrodt and Covidien on the NYSE will begin on June 17, 2013. Covidien shareholders are urged to consult their financial advisors and tax advisors regarding the particular consequences of the distribution in their situation, including, without limitation, the specific implications of selling Covidien ordinary shares on or prior to the distribution date and the applicability and effect of any U.S. federal, state, local and foreign tax laws.

"Today's announcement marks another important milestone toward the completion of the Pharmaceuticals spin-off," said José E. Almeida, chairman, president and CEO of Covidien. "As separate companies, Covidien and Mallinckrodt will have greater flexibility to focus on and pursue their respective growth strategies and capital needs, while potentially providing shareholders with greater value over the longer term."

The distribution is subject to the Securities and Exchange Commission (SEC) having declared effective Mallinckrodt's Registration Statement on Form 10, as amended, which Mallinckrodt has filed with the SEC and is available at www.sec.gov. The distribution is also subject to the conditions that will be set forth in the Separation and Distribution Agreement between Covidien and Mallinckrodt, the form of which has been filed as an exhibit to Mallinckrodt's Registration Statement on Form 10.

Covidien has received a private ruling from the U.S. Internal Revenue Service that, for U.S. federal income tax purposes, the distribution is tax-free to U.S. holders of Covidien ordinary shares. However, cash received in lieu of fractional shares may be taxable to such holders.

No action is required by Covidien shareholders in order to receive Mallinckrodt ordinary shares in the distribution. Covidien expects to mail the information statement to all shareholders entitled to receive Mallinckrodt ordinary shares in late June. The information statement is an exhibit to Mallinckrodt's Registration Statement on Form 10 that describes Mallinckrodt, including the risks of owning Mallinckrodt ordinary shares and other details regarding the distribution.