How Will AbbVie's $10.9 Billion Acquisition of Apogee Impact Its Dividend?
There's no need to panic.
Overview
On June 22, AbbVie (NYSE: ABBV) announced that it would acquire Apogee Therapeutics (NASDAQ: APGE) for $10.9 billion in cash. Some investors celebrated the move, since it will add zumilokibart, a promising investigational medicine for eczema, to AbbVie's lineup and help it solidify its leadership in immunology. However, others may fear that, given how much it will spend on this buyout, the transaction may impact AbbVie's dividend program, one of the company's key selling points. My view is that income seekers have nothing to worry about. Here's why.
Image source: The Motley Fool.
Expensive acquisitions can put downward pressure on a company's dividend program if they significantly reduce the cash available to be returned to shareholders. With AbbVie ending 2025 with $17.8 billion in free cash flow, some fear that this is what will happen. But it's worth noting that AbbVie is a Dividend King, or a corporation with 50 (or more) consecutive years of dividend increases, once we factor in the time it spent under Abbott Laboratories' wing.
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Originally published at www.fool.com.