Mergers and acquisitions (M&A)

Insurance Journal  4 hrs ago  Comment 
Ironshore has expanded its mergers & acquisitions capabilities with a team of new hires in the Americas and broadened office presence to serve Canada and Latin America. In addition, to support heightened transaction volume throughout the Americas...
The Times of India  Mar 23  Comment 
M&A-KEKST/BREAKINGVIEWS:BREAKINGVIEWS-Gershon Kekst built an M&A legacy beyond his firm
The Hindu Business Line  Mar 22  Comment 
Developers seek to divest to cut debt and free up equity, while investors are scouting for projects with right valuation
The Times of India  Mar 22  Comment 
FORTUM-M&A/ (PIX):Finland's Fortum vows to keep a cool head in M&A pursuit
The Times of India  Mar 22  Comment 
The Economic Times  Mar 21  Comment 
According to India M&A survey by KNAV, a tax and audit consultancy, deals are often sourced from consultancies and advisories.
Benzinga  Mar 20  Comment 
2016 may have seemed like a busy year for M&A activity, but it was in fact quite muted. According to CNBC's Mike Santoli, global M&A activity last year was roughly on the same level it was back in 2007. Moreover, as a percentage of global GDP and...


How Stocks react to M&A

When companies announce that they are going to be buying other companies, the stock prices of both institutions react. However, they don't usually react the same way. One stock price typically goes up while the other stock price typically goes down.

The Price of One Stock Goes Up

The stock that usually benefits the most from a merger or an acquisition is the stock of the company that is being acquired. In most cases, the stock price of the company that is being acquired goes up.

The reason the stock price of the company being acquired typically goes up is the company that is doing the acquiring usually pays a premium for the stock of the company it is acquiring. For instance, when Pfizer announced it was going to acquire Wyeth, the price of Wyeth stock jumped higher.

The Price of the Other Stock Goes Down

The stock that usually benefits the least—at least in the short term—from a merger or an acquisition is the stock of the company that is doing the acquiring. In most cases, the stock price of the company doing the acquiring goes down.

The reason the stock price of the company doing the acquiring typically goes down is the company is taking on increased risk by acquiring the new company. Companies involved in mergers and acquisitions like to talk about the "synergies" the combination of the two companies will create, but there are no guarantees combining two companies will result in improved performance and profits

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