Question:

A company with a higher P/E multiple acquires one with a lower P/E multiple. Is this deal accretive or dilutive?

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Answer:

It depends on how the buyer is paying for the acquisition.

If it's an all stock deal, then the deal will be accretive.

If it's not an all stock deal, then you would need more information to know whether the deal was accretive or dilutive.

Other

Merger Model

Merger Model

What is the difference between a merger and an acquisition?

Merger Model

Is there a shortcut to determine whether a transaction is accretive or dilutive to shareholders?

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Why would an acquisition be dilutive?

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Walk me through a basic merger model

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Why does goodwill get created in an acquisition?

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Why would a strategic acquirer typically be willing to pay more for a company than a private equity firm?

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In an all-stock deal, how can you quickly tell if a deal will be accretive or dilutive?

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What are some reasons for why a company would want to acquire another company?

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What are synergies? What kinds of synergies are there?

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