Mergers and acquisitions (M&A)

RECENT NEWS
Reuters  9 hrs ago  Comment 
Barclays Plc has named Larry Hamdan as head of mergers and acquisitions for the Americas, the UK investment bank said on Friday.
Reuters  Mar 6  Comment 
The following bids, mergers, acquisitions and disposals were reported by 2300 GMT on Friday:
Reuters  Mar 5  Comment 
The following bids, mergers, acquisitions and disposals were reported by 1430 GMT on Thursday:
The Hindu Business Line  Mar 5  Comment 
Financial giant J P Morgan Chase has promoted India-born executive Anu Aiyengar as co-head of mergers and acquisitions for North America, making her one of the most senior women running a mergers...
Reuters  Mar 4  Comment 
JPMorgan Chase & Co, the No. 1 adviser on U.S. mergers and acquisitions year-to-date, appointed regional co-heads for its M&A practice in North America and Europe, Middle East and...
Reuters  Mar 4  Comment 
The following bids, mergers, acquisitions and disposals were reported by 2100 GMT on Wednesday:
Wall Street Journal  Mar 4  Comment 
Shares in Bouygues have soared on hopes that a deal to sell its telecom business is imminent. But so far, the French company seems intent to play hard to get.
FierceBiotech  Mar 4  Comment 
French biotech Genfit is considering putting itself up for sale, Bloomberg reports, citing people close to the situation who say the company's in-development treatment for a pervasive liver disease could bring buyers to the table.




 
TOP CONTRIBUTORS

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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