Mergers And Acquisitions

Mergers And Acquisitions

The often bandied terms of mergers and acquisitions are familiar to the business world and the stock market experts, but some Canadian investors are sadly unfamiliar with the terms’ definitions and what affect this may have on their investments. This introduction to these business actions and their stock market results may help. In the case of a merger, two or more companies combine their resource entities to make a new corporate entity different from the entities that originally entered into the merger.

This can affect the investor in a few ways. For instance, if there are two companies intending to merge and one of the company’s stock values is higher than the other, the resulting stock price of the newly formed corporation will find a middle ground between the two. This can affect the investor negatively by decreasing their investment value and percentage of company ownership. It is at this time that the newly formed corporation can implement a buy back program or some other value adding operation. However, a merger can increase stock value if both companies are strong performers and their financial outlook is positive.

Mergers

The Canadian Competition Bureau oversees merger requests to ensure … Read the rest

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