Abbott's Mylan deal paying off big as M&A speculation sends shares soaring
- It's only been a couple of months since Abbott traded its established markets generics division for 110 million shares of Mylan, but it's already paying off in a big way.
- Since the trade, the value of Abbott's equity position has increased from roughly $5 billion to more than $7 billion. Mylan's share price has swelled by more than 28% in the last three months.
- Much of the increase in stock price is driven by speculation about a Teva takeover bid for Mylan, which was formalized on Tuesday.
Teva's $40 billion offer for Mylan certainly has contributed to Abbott's growth. In addition, Mylan's $28.9 billion bid for Perrigo also helped bolster the company's shares—although Perrigo's board has unanimously rejected the offer.
So far, Abbott has sold one-third of the shares it got in the February deal, but it plans to hold onto the rest for now. Depending on how aggressively Teva pursues Mylan, and how much the latter company resists, the company's stock value may keep rising.
- Bloomberg Business Mylan Deal Is Abbott’s Gain as Drugmaker’s Stake Grows and Grows