Publications
Publications
- September 2002 (Revised March 2003)
- HBS Case Collection
Technical Note on Equity-Linked Consideration, Part 1: All-Stock Deals
Abstract
What the acquiring company pays for a target in a merger or acquisition is called "consideration." Consideration can be in the form of cash, shares, or a combination of cash and shares. During the 1990s, equity-linked consideration became the dominant method of payment in the United States. This case series describes the basic mechanics of equity-linked consideration. Part 1 looks at the effects of all-stock consideration on the values realized by the shareholders of the target and acquiring companies.
Keywords
Citation
Baldwin, Carliss Y. "Technical Note on Equity-Linked Consideration, Part 1: All-Stock Deals." Harvard Business School Technical Note 903-027, September 2002. (Revised March 2003.)