Mergers and acquisitions (M&A)

RECENT NEWS
The Straits Times  May 22  Comment 
May 23, 2015 12:54 AM MERGERS and acquisitions will continue to play a key role in how Thai Beverage expands, especially if the targets come with strong beverage brands, the company said yesterday.
Yahoo  May 22  Comment 
With the indexes drifting at the top of its range, the stocks making new all-time highs suggest the market is sniffing out a continued deal boom.
Financial Times  May 22  Comment 
Brothers Michael and Yoel have advised on takeovers worth $152bn in two years and changed the fate of business empires
Forbes  May 21  Comment 
At Billionairesportfolio.com we are always looking to align ourselves with stocks owned by billionaire investors that have the potential to double on a fundamental catalyst.
MarketWatch  May 20  Comment 
Salesforce CEO Marc Benioff, taking a page from rival Oracle, bashes the competition and touts the company’s stronger performance in the quarter, while avoiding any comments on merger rumors.
The Economic Times  May 20  Comment 
CCI Chairman Ashok Chawla said that the regulator has taken a number of initiatives "for speedy and efficient disposal of cases".
Reuters  May 20  Comment 
The following bids, mergers, acquisitions and disposals were reported by 2000 GMT on Wednesday:
Telecom Ramblings  May 20  Comment 
There's a billionaire buying US Cable MSO assets this month, and it isn't John Malone this time. The French group Altice SA, controlled by Patrick Drahi, jumped into the fray this morning with a deal to buy Suddenlink for $9.1B. Supposedly they...
The Hindu Business Line  May 20  Comment 
European shares edged up slightly on Wednesday after rebounding strongly in the previous session, with the telecom sector getting a big lift from deal-making and takeover talk. The pan-Eu...
MarketWatch  May 19  Comment 
An academic study shows that when both parties to a merger share an auditor, as in the case with Verizon Communication’s proposed purchase of AOL, the target price often suffers.




 
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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