Mergers and Acquisitions
Mergers and acquisitions are transactions that combine firms or assets — a capital-allocation decision dressed as a strategy slide.
Definition
A merger combines equals (rarely actually equal); an acquisition is a purchase. Cash, stock, or mix; friendly or hostile; regulatory review. The premium is a transfer unless synergies are real and net of integration cost.
Why it matters
Most large-cap ‘growth’ is bought, not built. Deal math, not the adjective ‘strategic,’ decides whether ROIC survives.
Case
A stock-for-stock deal sold as synergy. The target holders get a premium; the acquirer multiple compresses by the same present value. Nobody created a third dollar.
How to read it
Who gets the premium, what is the synergy after tax and dis-synergy, and what happens to net debt. Then wait for the first impairment.