M&A – Accretion/Dilution
Articles
What Is Accretion/Dilution in M&A? EPS Impact Explained
A plain-English guide to accretion and dilution in M&A: what the terms mean, why the acquirer's P/E multiple drives the outcome, and how to spot it before building a full model.
How to Calculate Accretion/Dilution: A Step-by-Step Interview Walkthrough
Learn how to calculate accretion/dilution for a stock-for-stock M&A deal, step by step — exchange ratio, pro forma EPS, and the break-even P/E rule interviewers expect you to know.
What Is Accretion/Dilution Analysis? A Guide for M&A Interviews
A plain-English guide to accretion/dilution analysis in M&A: why it matters, the intuition behind cash vs. stock deals, and how synergies factor in.
How to Answer Accretion/Dilution Interview Questions (Step by Step)
A step-by-step framework for solving accretion/dilution interview questions, including the cash vs. stock mental-math shortcut and how to solve for synergy break-even.
Cases
Accretion/Dilution: The Basic Concept
As an M&A analyst, you are tasked with determining whether a proposed 100% stock acquisition will be accretive or dilutive to the acquirer's earnings per share (EPS), and explaining why EPS accretion or dilution isn't the only metric that matters when judging whether a deal makes sense.
Full Accretion/Dilution Analysis
As an M&A analyst, you are tasked with building a full accretion/dilution analysis for an acquisition — modeling pro-forma EPS under both an all-cash and an all-stock consideration structure, and then solving for the pre-tax synergies each structure would need to reach EPS breakeven.