Anheuser Busch Buyout
Yesterday, InBev closed on its ALL CASH buyout of Anheuser Busch. I believe the cash payout happened yesterday. Many A-B employees had significant amounts of A-B stock with NUA in their 401(k) plans. Is that NUA now gone? Does this prevent all of these A-B employees from taking advantage of the NUA tax break? Is the NUA in the account prior to the buyout converted to ordinary income or does it become capital gain?
Permalink Submitted by Alan Spross on Wed, 2008-11-19 17:42
The NUA opportunity is gone since this was an all cash buyout. If AB shareholders had received InBev replacement shares instead of cash, the cost basis would have been carried over to the replacement shares, but this cannot happen with cash.
A retired employee that understood the offer could have done an LSD including the NUA shares, and if they were in a taxable account yesterday, the liquidation would have resulted in a LT gain for the amount of the NUA. For long term retirees who did LSDs in the past, they would also have NUA, but gains from the premium in the offer would probably have been in excess of the NUA and would only get the LT rate if the shares had been in the taxable account for over 1 year.
For those with AB still in the plan as of yesterday, their NUA is gone but at least they got a nice premium for their shares, and now do not have to worry about diversification.