Accretion/Dilution Question

Abbvie is acquiring Aztra. Abbvie is offering a 30% premium over the Aztra pre-announcement price and the offer is to be paid 40% in cash and 60% in stock. The pre-announcement share price of the companies were $30 (Abbvie) and $20 (Aztra) per share.

Is the deal accretive or dilutive? Specifically, what is the amount of accretion or dilution for the next fiscal year after the deal. Consider the following assumptions:

1. Assume that the cash portion of the deal is going to be financed issuing new debt. The interest expense on the new debt issued is 4% per year.

2. For simplicity, assume no transaction or financing fees.

3. Pre-tax deal synergies are $2,318;

4. The effective tax rate of the combined entity after the acquisition is 20%;

5. The total write-up of target's tangible plus intangible assets is $3,000 with straight-line depreciation and amortization over 10 years;

Wall Street analysts' estimates, before the deal announcement, for the next fiscal year for both companies are:

Mean Estimates	Abbvie (acquirer)	Aztra (target)
Net Income ($)	8,000	2,000
EPS ($)	2.00	1.33
Diluted Shares Out	4,000	1,500

The EPS $Accretion or ($Dilution) amount is:

(Enter the $ accretion as positive number, and $ dilution as a negative number. Enter $ amounts not %)