Mergers and acquisitions (M&A)

RECENT NEWS
FierceBiotech  5 hrs ago  Comment 
A Phase III victory for Synergy Pharmaceuticals' constipation drug has made the company an attractive takeout target, analysts say, with the acquisitive Valeant Pharmaceuticals a potential suitor.
Reuters  10 hrs ago  Comment 
The following bids, mergers, acquisitions and disposals were reported by 2000 GMT on Thursday:
TechCrunch  Jun 17  Comment 
 FreedomPop is taking another step ahead today in its bid to build out a global mobile business based on free voice, text and data bundles and upselling additional services. Amid months of M&A rumors, the startup has raised another $30...
Reuters  Jun 17  Comment 
The following bids, mergers, acquisitions and disposals were reported by 1330 GMT on Wednesday:
Forbes  Jun 16  Comment 
Yesterday, CVS Health announced it will acquire Target's 1,600 pharmacies and 80 clinics for $1.9 billion, with plans to operate them as in-store shops.
Reuters  Jun 16  Comment 
U.S. stocks rose on Tuesday following back-to-back daily declines, with merger activity more than offsetting market concerns as Greece struggles to avoid a default on its debt.
Reuters  Jun 16  Comment 
The following bids, mergers, acquisitions and disposals were reported by 2000 GMT on Tuesday:
WA Business News  Jun 16  Comment 
With the takeovers of iiNet and Amcom Telecommunications heading into the final stretch, the investment bankers and other advisers that worked on these deals will be looking forward to a very handy pay day of more than $40 million.
Reuters  Jun 15  Comment 
James Frawley, Macquarie Group Ltd's U.S. head of mergers and acquisitions, has left the Australian investment bank to join Nomura Co Ltd, people familiar with the matter said on...
Financial Times  Jun 14  Comment 
Lender under growing pressure to boost profits and shareholder returns




 
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

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki