Replies to post #8649 on The Rising Influence of Rising Affluence

[DewDiligence]

ABT raises 2014 non-GAAP EPS guidance to $2.19-2.29 (from old range of $2.16-2.26):

http://finance.yahoo.com/news/abbott-reports-second-quarter-2014-114500859.html

The new 2014 non-GAAP EPS guidance represents 9-14% growth vs 2013.

Note: The non-GAAP 2014 EPS guidance includes contribution from the developed-markets branded-generics business sold to MYL (#msg-104271033 because this deal will not close until early 2015. (Starting in 3Q14, the business sold to MYL will be accounted for as a discontinued operation on the P&L statement.)

[DewDiligence]

(MYL/ABT)—US Treasury’s new rules would appear to prohibit the “spinversion” deal between these companies in which MYL was to acquire ABT’s (negative-growth) branded-generics business in Europe, Japan, Canada, Australia, and New Zealand (#msg-104264092):

http://www.treasury.gov/press-center/press-releases/Pages/jl2645.aspx

Prevent a U.S. entity from inverting a portion of its operations by transferring assets to a newly formed foreign corporation that it spins off to its shareholders, thereby avoiding the associated U.S. tax liabilities, a practice known as “spinversion.” (Action under section 7874 of the code) In some cases a U.S. entity may invert a portion of its operations by transferring a portion of its assets to a newly formed foreign corporation and then spinning-off that corporation to its public shareholders. This transaction takes advantage of a rule that was intended to permit purely internal restructurings by multinationals. Under today’s action, the spun-off foreign corporation would not benefit from these internal restructuring rules with the result that the spun off company would be treated as a domestic corporation, eliminating the use of this technique for these transactions.

No comment yet from MYL or ABT.

[DewDiligence]

ABT -2% on fallout from ABBV-SHPG news (#msg-107202551). If MYL pulls out of its “spinversion” with ABT’s European branded-generics business (#msg-104271033), ABT will lose a great opportunity to unload its worst assets onto a company (MYL) who will buy just about anything to build “scale.”

[DewDiligence]

ABT remains on-track to complete the MYL “spinversion” in 1Q15. (Source: JPM webcast.)

[DewDiligence]

ABT has (finally) sold all of its MYL shares acquired in the 2014 deal that allowed MYL to become a Dutch-domiciled corporation and allowed ABT to shed one of its worst businesses (#msg-104271033):

https://www.prnewswire.com/news-releases/mylan-to-complete-1-billion-share-repurchase-plan-300578694.html