Posted on 10/15/2014 8:54:37 AM PDT by BlueStateRightist
Pharmaceutical giant AbbVie Inc. said it was re-evaluating its planned $54 billion acquisition of Shire PLC in light of new U.S. rules making it harder for American companies to lower taxes through overseas deal making.
The rethink is the most dramatic fallout so far from a broad crackdown by Washington on so-called inversions—takeover deals structured to relocate tax domiciles of U.S. companies overseas to capture tax benefits.
(Excerpt) Read more at online.wsj.com ...
ABBV has dropped about 6 points off its high, but is still trading at 17.1 times this year’s estimate. Div is pretty good at $1.68, product pipeline seems OK - they are coming out with a new Hepatitis C treatment that may undercut Gilead on price. The main issue is the patent expiration on Humira in 2016.
So I still like ABBV, although it seems fully valued in the low 50s. Definitely a hold.
Unless the law has been changed - and I'm almost positive it hasn't since the Congress are in permanent enforced recess it seems - how can there be a 'crackdown' when companies already using inversions are following the law to the letter and why should companies considering an inversion be worried....unless the Obamaites are moving the goalposts as usual?
Gandalf would not approve.
“a broad crackdown by Washington on so-called inversions—takeover deals structured to relocate tax domiciles of U.S. companies overseas to capture tax benefits.”
Obama isn’t, as usual, going through Congress. He’s using rules and regulations, and the IRS to effect changes re inversions.
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