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Home / Business / AbbVie's Acquisitions Report Card shows investors have reason to worry about Allergan Buyout – The Motley Fool

AbbVie's Acquisitions Report Card shows investors have reason to worry about Allergan Buyout – The Motley Fool



You can't predict the future by just looking at the past.

AbbVie (NYSE: ABBV) announced in June that it plans to acquire Allergan (NYSE: AGN) . Many immediately panned the deal as a $ 63 billion mistake. Others were more optimistic about the transaction. These views were mainly based on the price tag of the acquisition and the well-known advantages and disadvantages of Allergan.

However, there are many unknowns associated with buying a biopharmaceutical company. Evaluation of a purchase involves digging into the target company's pipeline to try to determine how much value it can bring. It requires considerable expertise.

This is not the first acquisition for AbbVie. Can the company's previous agreements provide some insight into how adept AbbVie's team has been to identify the real value of potential acquisition targets? I think so. With this in mind, I developed a report card of AbbVie's acquisition to identify the possible implications for the Allergan agreement.

  Degree checkbox with red marker

Image source: Getty Images.

AbbVie's report card

AbbVie was spun from Abbott Labs

in 2013. Since then, the company has started five acquisition agreements. Here is AbbVie's acquisition card:

Acquisition targets

Year

Transaction Amount

Grade

Shire 2014 $ 55 Billion D


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