Recent M&A News
Mergers and acquisitions are a large part of the business world, often impacting Wall Street. When companies merge or acquire, stock symbols change, valuations shift and investors must adjust their portfolios accordingly.
Types of Mergers & Acquisitions
Generally, businesses merge or complete an acquisition in a few basic ways.
Cash-for-Stock Acquisition
An acquisition involves a cash purchase of all that company’s stock, cashing out all its stockholders. In a situation such as this, the controlling company can either merge the 2 firms or operate the other business normally. In extreme cases, the controlling business may choose to sell off the pieces of an underperforming business, keeping the physical or intellectual properties it prefers to retain.
Stock-for-Stock Merger
If 2 companies merge, they combine assets, going “stock-for-stock,” either trading under 1 firm’s stock ticker or listing under a new ticker symbol.
IPO via Special Purpose Acquisition Company
Finally, a business that plans to go public may choose to merge with what is known as a special purpose acquisition company (SPAC). The new company is created to effect the merger, and a stock ticker symbol is assigned to the SPAC. For example, Lucid Motors merged with Churchill Capital Corp. IV (NYSE: CCIV) to effect a $4.4 billion IPO and list as (NYSE: LCID).
Check out Benzinga’s mergers & acquisitions calendar to learn when these deals are set to close across the marketplace.