👨‍🏫 L12 Mergers

There is a bit of a recipe:
1.) General Principal is that the value of the merged company is A+T+S, ie Combined Market Cap = Acquirer MC + Target MC + Synergies.
2.) Acquirer’s shares turn into shares of combined company, 1 for 1. New Shares = Targets Mkt Cap (1+premium) / Acquirer’s share price Total # of shares = # of old acquirer shares + # of new shares. 3.) Share Price = Combined Market Cap / Total # of shares.
4.) Return = 100%*(New Share Price - Old Share Price)/(Old Share Price) Or (New/Old-1)*100%