Covidien Ltd. (COV) shareholders approved shifting the medical company's place of incorporation to Ireland from Bermuda, a move that could carry tax protections but also got Covidien kicked out of the Standard & Poor's 500 index.

The change now requires approval from the Supreme Court of Bermuda, which Covidien expects to receive June 4, the company said Thursday following a shareholders' meeting. The company will thereafter be known as Covidien Plc, but it will retain its stock symbol on the New York Stock Exchange.

The shareholder vote was followed late Thursday by an S&P release saying Covidien has been rendered "ineligible for continued inclusion" in both the S&P 100 and S&P 500. MetLife Inc. (MET) is replacing Covidien in the S&P 100, while FMC Technologies Inc. (FTI) is the replacement for the S&P 500.

The ejection is likely to trigger selling of Covidien shares by big investors that track companies covered by the S&P indexes, although the company has said it expects to rebound from share-price losses.

Its shares fell 2.6% to $33.25 in after-hours trading Thursday after gaining 4 cents during the regular trading session.

Covidien, which makes a host of medical products, is currently incorporated in Bermuda by way of Tyco International Ltd. (TYC), from which the company separated in 2007. Covidien decided to leave Bermuda because of worries about potential changes in U.S. tax rules that would limit benefits enjoyed by companies in such countries that don't have tax treaties with the U.S., among other changes.

"If enacted, we determined that these proposals, due to their potentially wide-ranging scope, could have a material and adverse impact on the Company and its shareholders," Covidien said in a proxy filing with the Securities and Exchange Commission in late April.

Moving to the U.S. would have boosted the company's effective tax rate, hurting earnings. The company decided Ireland, where it already has a substantial presence, was a better fit.

Covidien's top executives are in Mansfield, Mass., where the company's U.S. operations are based. But it also has six facilities and nearly 2,000 employees in Ireland. It had already moved its tax residency there and is using "Dublin" datelines on its press releases.

Despite the protective benefits of the move, it also carries a drawback: getting punted from the S&P indexes.

Getting dropped means "institutional investors that are required to track the performance of the S&P 500 or 100 or such other indices or the funds that impose those qualifications would be required to sell their shares, which we expect would adversely affect the price of our shares," Covidien said in the proxy filing.

S&P's U.S. index requirements include U.S. incorporation, but S&P can at its discretion admit companies that are widely considered to be effectively based here despite official headquarters in an offshore locale. Moving from Bermuda to a much more developed market in Western Europe changed that dynamic for Covidien.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com