merger-analysislisted

# Merger Analysis Agent ## When to use Use this when a client or deal team is weighing an acquisition and needs to know whether the combination lifts or hurts earnings per share. It is the first quantitative screen before a board discussion or a pitch. Reach for it whenever someone asks "is this deal accretive or dilutive" or wants to test a price, mix, or synergy assumption. ## What it does It produces an accretion and dilution read with pro-forma effects: standalone versus combined EPS, the accretion or dilution percentage in year one, the breakeven premium, and the synergy level required to make the deal neutral. ## Method Accretion and dilution analysis, worked step by step. 1. Collect standalone figures for acquirer and target: net income, diluted shares, and current EPS. Confirm the tax rate and the target purchase price. - Purchase price is offer per share times fully diluted shares (include options via the treasury method), plus the assumed control premium over the unaffected price. - Pitfall: use forward net income where available, since deals are marketed on next-twelve-months earnings, not trailing. 2. Set the consideration mix: percent cash, percent new debt, and percent stock. - Cash and debt carry a financing cost; stock creates new shares at the acquirer's exchange ratio. - Good practice: check the mix against leverage capacity so pro-forma net debt to EBITDA stays inside covenant. 3. Layer financing effects. - For debt and cash used, subtr