Mergers and acquisitions (M&A)

RECENT NEWS
The Economic Times  3 hrs ago  Comment 
As per the new guidelines, a summary of every combination (merger and acquisition) under review will be published on the website of CCI, to ensure greater transparency.
Japan Today  4 hrs ago  Comment 
Deal makers from New York to London had a busy first half of the year, and mega-mergers drove the frenzy. Companies around the world announced mergers and acquisitions worth $2.3 trillion, according to figures from data provider Dealogic, the...
The Economic Times  Jul 3  Comment 
CCI said the changes make its regulations more "forward looking, in keeping with some of the best practices in other jurisdictions".
Forbes  Jul 2  Comment 
The global M&A industry saw investment banks help companies close deals worth $820 billion for the second quarter of the year according to data released by Thomson Reuters. This is 23% higher than the $667 billion figure for the previous quarter,...
FiercePharma  Jul 2  Comment 
What's with all the M&A rumors floating around in the animal health world? Just look at Zoetis' Apoquel and it's clear why Big Pharma names are keen to bolster their positions in the space.
The Australian  Jul 2  Comment 
Investors would do well to focus on fundamentals driving different segments of retail and UBS offers useful insights.
Reuters  Jul 2  Comment 
The following bids, mergers, acquisitions and disposals were reported by 2000 GMT on Thursday:
Motley Fool  Jul 2  Comment 
Mergers and acquisitions activity is on pace to hit its highest level in terms of deal value in eight years. If you're looking for industries where consolidation could be on the horizon, look no further than these four.
Reuters  Jul 1  Comment 
(Click on for a story on Thomson Reuters' first-half M&A rankings for Brazil in terms of deal value and number of deals) SAO PAULO, July 1 (Reuters) - Bankers dismayed by the small number of...




 
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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