Abbott Laboratories and Mylan Inc on Wednesday said they would go ahead with their $5.3 billion deal in which Mylan will purchase part of Abbott's overseas generics business and set up headquarters in the Netherlands, but they tweaked the terms of the transaction. The move comes after the U.S. Treasury on Sept. 22 made changes to the corporate tax rules that govern such "inversion" merger deals, in which companies move their operations to countries with lower taxes than in the United States. The new rules raise the bar for this tax treatment and also make it harder to reap other tax benefits of an inversion.About ten U.S. companies had deals in the works when the Treasury changed the rules. Some, including Salix Pharmaceuticals and former Abbott business Abbvie, pulled out of their own inversion-based deals, while others decided to go forward with their deals.Investors and analysts were not certain where Abbott and Mylan would fall."The positive takeaway is that Abbott still plans to close its deal with Mylan in the first quarter of 2015, despite the pressure on inversions from the U.S. Treasury, and some walking away by other companies from inversions," said Jeff Windau, an analyst with Edward Jones. "The (tax law) changes from Treasury are making people re-look at deal terms, and deals are not as favorable now. That's what happened here, there had to be some tweaks."
Abbott Laboratories (Abbott) is engaged in the discovery, development, manufacture, and sale of a portfolio of science-based health care products. Shares of ABT remained unchanged at $42.39. In the past year, the shares have traded as low as $35.65 and as high as $44.20. On average, 4594200 shares of ABT exchange hands on a given day and today's volume is recorded at 3170.
Mylan Inc. (Mylan) is a fully integrated global pharmaceutical company that develops, licenses, manufactures, markets and distributes generic, branded generic and specialty pharmaceuticals. Shares of MYL remained unchanged at $52.04. In the past year, the shares have traded as low as $36.97 and as high as $57.52. On average, 4954920 shares of MYL exchange hands on a given day and today's volume is recorded at 0.
Source
