Covidien Ltd. Announces Proposed Change in Incorporation

Hamilton, Bermuda - 23 December, 2008 - Covidien Ltd. (NYSE: COV; BSX: COV) today announced that its Board of Directors has unanimously approved moving the Company's principal executive office from Bermuda to Ireland. This move is part of a reorganization that will create a newly formed Irish company, Covidien plc.

The first step in this reorganization is the establishment of Covidien's tax residency in Ireland later this month. Covidien shareholders then will be asked to vote in favor of completing the reorganization at a shareholders meeting. If conditions are satisfied, including approval by Covidien's shareholders and the Supreme Court of Bermuda, Covidien plc then will replace Covidien Ltd. as the ultimate parent company.

"The decision to move to Ireland was made after an extensive analysis of several possible alternatives," said Chairman, President and Chief Executive Officer Richard J. Meelia. "Assuming shareholder approval, incorporation in Ireland will offer increased strategic flexibility and operational benefits as we continue to expand the rapidly growing international portion of our business."

Ireland has a stable economic, legal and regulatory environment and enjoys strong relationships as a member of the European Union. Additionally, Ireland enjoys a long history of international investment and a good network of tax treaties with the United States, the European Union and several other countries where Covidien has major operations.

Covidien has a well-established presence in Ireland, where it has had operations for nearly 30 years. The Company has five factories serving the Medical Devices and Imaging Solutions segments, as well as sales and customer service facilities. In total, Covidien has almost 2,000 employees in the country.

Covidien does not expect the reorganization will have any material impact on its financial results. There will be no changes to Covidien's U.S. operations or workforce. Full details of the proposed transaction, and the associated benefits and risks, will be provided to shareholders in a proxy statement with respect to the shareholders meeting.

Covidien will, upon completion of the reorganization, continue to be subject to United States Securities and Exchange Commission (SEC) reporting requirements, and Covidien's common shares will continue to be listed on the New York Stock Exchange under the symbol COV. Once the reorganization is completed, Covidien will terminate its listing on the Bermuda Stock Exchange.

A Questions & Answers document has been posted on the Company's web site in the Investor Relations section. The URL for this document is http://investor.covidien.com.

This communication is being made in respect of the proposed reorganization. In connection with the reorganization, Covidien intends to file with the SEC a proxy statement and mail the proxy statement to its shareholders. Shareholders are urged to read such proxy statement when it becomes available because it will contain important information. The proxy statement will be, and other documents filed or to be filed by Covidien with the SEC are or will be, available free of charge at the SEC's web site (www.sec.gov) and at Covidien's web site (www.covidien.com).

Covidien and its directors and executive officers and other persons may be deemed participants in the solicitation of proxies in connection with the proposed reorganization. Information about the direct or indirect interests of the participants, by security holdings or otherwise, is available in Covidien's Annual Report on Form 10-K for the year ended September 26, 2008 and proxy statement for Covidien's 2008 annual meeting, which were filed on November 21, 2008 and January 24, 2008, respectively, and will be available in the proxy statement to be filed in connection with the reorganization.

ABOUT COVIDIEN LTD.

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 four segments: Medical Devices, Imaging Solutions, Pharmaceutical Products and Medical Supplies. With 2008 revenue of nearly $10 billion, Covidien has more than 41,000 employees worldwide in 59 countries, and its products are sold in over 140 countries. Please visit www.covidien.com to learn more about our business.