| Dilutive Acquisition | |
 An acquisition that will decrease the acquiring company's EPS. |
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 These acquisitions will tend to cause a firm's market price to decline, as they are expected to decrease the company's future earnings. In essence, the price paid by the acquiring firm exceeds its addition to EPS. As a general rule, a dilutive merger or acquisition occurs when the P/E ratio of the acquiring firm is less than that of the target firm. |
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 The Wacky World of M&As - Do you want your company to sandbag or greenmail? Welcome to the dramatic world of mergers and acquisitions. The Basics of Mergers and Acquisitions - M&A deals always catch headlines, but what do these deals really mean to investors? Learn what corporate restructuring is, why companies do it, and why it sometimes doesn't work. |
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