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An All-Stock Deal in M&As

An all-stock deal may give current foreign shareholders of the acquiring firm the opportunity to sell their shares if they do not believe in the deal, or it may lead more traders, both domestic and international, to snap up more shares of the target company in the hope that it may be sold at a higher value than the price at which it is currently trading. On a more medium-term basis, a cross-border acquisition could also mean that the geographical distribution of shareholders will be much more diverse, so when it comes time to hand out dividends, we may see more international investors repatriate their dividend payments. Bottom line, an all-stock deal will mean a smaller currency conversion and probably one that is done over a longer period of time.

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