In June of 2015, Actavis changed their name back to Allergan, and ticker symbol back to (AGN). While this can be reflected in the accounting system by performing another merger, we suggest instead to follow the company, and simply change the name and ticker symbol in the accounting system. If for any reason, your club has not yet entered the merger transaction from March of 2015, make sure you do that first.
If you have already entered the merger, you can change the name and the ticker symbol using the steps in FAQ 1392:
Actavis completed its merger with Allergan on 3/17/2015 for cash and Actavis stock.
The SEC filing for this merger was found in the Investor Relations area of the Actavis web site.
This merger is a cash plus stock reorganization; for tax purposes this is treated as a sale of Allergan and the proceeds used to purchase Actavis. All the information below is from the information available from the S-4 filed with the SEC. Actavis gave an example of cost basis calculations in an IRS form 8937. It used a price of 305.00 per share for Actavis. The same price will be used in the calculations in these instructions, but be sure to check your broker statement to confirm this.
Listed below these instructions is a sample of a spreadsheet showing how some of the figures you calculate might come out. If you would like to use the spreadsheet to help calculate these numbers, please CLICK HERE (https://docs.google.com/spreadsheets/d/1wCWZqDWtfsqeb4oXb9pmVkPWnyQLAezo6uNSqQrNYcA/).
1. Allergan Sell Transaction
The total merger consideration is $241.5515 per Allergan share. This is $129.22 in cash and
$112.3315 in Actavis shares (305 x .3683). Calculate the total value received for your Allergan shares by multiplying 241.5515 by the total shares of Allergan owned.
Total Proceeds = [241.5515 x (# of Allergan shares owned)] – (Reorganization fee).
Use the Suspense account to receive the sale proceeds.
Enter a sale for all shares of Allergan for the total proceeds calculated above.
Date this transaction 3/17/2015.
2. Transfer Cash Received
Transfer from the Suspense account to the Broker account (or bank if appropriate), the merger cash received from this transaction. This will be [($129.22 x # of Allergan shares) – any reorganization fee]. If your Suspense account balance was zero when you entered the sell transaction above, then the balance after transferring the cash received will be the total purchase price of the Actavis shares you received in this merger. Date this transaction 3/17/15.
3. Actavis Buy Transaction
Enter a buy transaction for the TOTAL number of shares you were entitled to receive in this merger. This will be .3683 x (number of Allergan shares held). Be sure to include the fractional shares.
Date the transaction 3/17/2015. The total purchase price will be the amount remaining in the Suspense account, if the Suspense balance was zero when this process was started. The amount should be 112.3315 x (# of Allergan shares owned).
4. Actavis Fractional Share Sale
Enter a sell transaction for Actavis. Sell only the fractional shares for the cash-in-lieu reported on your broker statement. Date this sell transaction 3/18/15.