Mergers and acquisitions (M&A)

RECENT NEWS
Reuters  Apr 17  Comment 
The following bids, mergers, acquisitions and disposals were reported by 1300 GMT on Friday:
Reuters  Apr 16  Comment 
French oil major Total and British rival BP are under no pressure to make acquisitions after the recent takeover of BG Group by Anglo-Dutch rival Shell, they said on Thursday.
FiercePharma  Apr 16  Comment 
Fitch Ratings is raising the flag on pharma M&A. The credit ratings agency says the current spate of dealmaking is putting some pressure on European Big Pharma players.
Financial Times  Apr 15  Comment 
Retailers, led by Sports Direct, lift broad market
Forbes  Apr 15  Comment 
Airline stocks have capitalized on lower oil prices to extend their best rally in years, but the real seeds of their turnaround were planted in the wake of the 2008 financial crisis.
The Economic Times  Apr 15  Comment 
According to the assurance, tax and advisory firm Grant Thornton, though the deal tally suffered a significant decline over last year.
Reuters  Apr 15  Comment 
The following bids, mergers, acquisitions and disposals were reported by 1330 GMT on Wednesday:
Wall Street Journal  Apr 14  Comment 
Sales of independent auto dealers rose 60% last year, and deals this year are on track for another bumper year, as the recent boom in auto sales has bigger chains gobbling up small fry.
Financial Times  Apr 13  Comment 
Low interest rates, shareholder demands and high share prices will trigger dealmaking




 
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