8-KLeadership ChangesMaterial AgreementsFinancial Events+1

AbbVie Inc. 8-K Report, Material Agreement (Jul 18, 2014)

Filed July 18, 2014For Securities:ABBV

Summary

AbbVie Inc. (ABBV) filed an 8-K on July 18, 2014, announcing a recommended combination with Shire plc. This strategic move involves Shire shareholders receiving £24.44 in cash and 0.8960 shares of a newly formed entity, New AbbVie, through a court-sanctioned scheme of arrangement. AbbVie stockholders will receive one New AbbVie share for each AbbVie share they hold, making both companies wholly owned indirect subsidiaries of New AbbVie, which is expected to list on the NYSE. The transaction is subject to shareholder approvals, court sanction, and regulatory clearance, with an anticipated closing in the fourth quarter of 2014. To finance this significant acquisition, AbbVie entered into a £13.5 billion 364-day bridge credit facility with JPMorgan Chase Bank, N.A. This facility is intended to cover cash consideration, fees, and expenses, contingent on the non-issuance of senior unsecured notes prior to closing. Additionally, AbbVie disclosed an agreement to indemnify certain executive officers for an excise tax on certain equity compensation related to the combination, ensuring they are not adversely impacted financially. The filing outlines key agreements including a Rule 2.7 Announcement, a Co-operation Agreement with Shire, and the Merger Agreement, alongside the Bridge Credit Agreement.

Key Highlights

  • 1AbbVie announced a recommended combination with Shire plc, creating a combined entity to be named New AbbVie.
  • 2Shire shareholders will receive £24.44 in cash and 0.8960 shares of New AbbVie per Shire share.
  • 3AbbVie shareholders will receive one share of New AbbVie for each AbbVie share they own.
  • 4The transaction is structured as a scheme of arrangement for Shire and a merger for AbbVie, with New AbbVie becoming the parent company.
  • 5A £13.5 billion 364-day bridge credit facility was secured from JPMorgan Chase Bank, N.A. to fund the cash portion of the transaction.
  • 6The combination is subject to various conditions including shareholder approvals, court sanction, and regulatory clearances, with an expected completion in Q4 2014.
  • 7AbbVie has agreed to indemnify certain officers for a potential 15% excise tax on certain equity compensation related to the transaction.

Frequently Asked Questions

This 8-K filing announces AbbVie Inc.'s definitive agreement to combine with Shire plc. It details the terms of the combination, the financing arrangements, and the key agreements entered into by the companies.

Shire shareholders will receive £24.44 in cash and 0.8960 shares of the new parent company, New AbbVie, per Shire share. AbbVie shareholders will receive one share of New AbbVie for each AbbVie share they hold. The transaction is valued at approximately £37 billion based on the announcement date.

AbbVie has secured a £13.5 billion 364-day bridge credit facility from JPMorgan Chase Bank, N.A. to finance the cash consideration, fees, and expenses associated with the combination. This facility is conditional on the absence of new senior unsecured notes being issued prior to the closing.

The combination is expected to be completed in the fourth quarter of 2014, subject to the satisfaction or waiver of all conditions, including shareholder approvals, court sanction, and regulatory clearances.