8-KOther Events

AbbVie Inc. 8-K Report, Corporate Update (Jun 2, 2016)

Filed June 2, 2016For Securities:ABBV

Summary

On June 1, 2016, AbbVie Inc. announced an accelerated share repurchase (ASR) agreement with JPMorgan Chase for $3.8 billion of its common stock. This significant repurchase program underscores the company's commitment to returning capital to shareholders and reflects confidence in its financial health and future prospects. The ASR is being executed in conjunction with the recently completed acquisition of StemCentrx, Inc., indicating a strategic approach to managing its capital structure post-acquisition. The initial delivery of shares is expected on June 2, 2016, with final settlement anticipated by the end of the fourth quarter of 2016. This move aims to enhance shareholder value by reducing the number of outstanding shares, potentially boosting earnings per share and signaling a strong financial position to the market.

Key Highlights

  • 1AbbVie entered into a $3.8 billion Accelerated Share Repurchase (ASR) agreement with JPMorgan Chase.
  • 2The ASR program is designed to repurchase AbbVie's common stock, returning capital to shareholders.
  • 3The agreement was executed on June 1, 2016, coinciding with the completion of the StemCentrx acquisition.
  • 4An initial delivery of approximately 54.4 million shares is expected on June 2, 2016.
  • 5The final settlement of the ASR is expected by the end of Q4 2016 and may be accelerated.
  • 6The total number of shares repurchased will be based on volume-weighted average prices during the repurchase term.

Frequently Asked Questions

The primary purpose of the accelerated share repurchase (ASR) agreement is for AbbVie to repurchase a significant amount of its own common stock, thereby returning capital to shareholders and potentially enhancing shareholder value through a reduction in outstanding shares.

This ASR is being undertaken in conjunction with AbbVie's previously announced acquisition of StemCentrx, Inc., which was completed on June 1, 2016. It reflects the company's strategy to manage its capital structure effectively following a major acquisition and demonstrates confidence in its financial position and future cash flows.

The total number of shares of AbbVie's common stock to be repurchased will be determined based on the daily volume-weighted average price of the stock during the term of the ASR transaction, subject to a discount and other potential adjustments as outlined in the agreement with JPMorgan Chase.

The final settlement of the accelerated share repurchase agreement is expected to occur before the end of the fourth quarter of 2016. However, the settlement could be accelerated at the option of JPMorgan Chase.