What Is an Acquisition Premium?
The acquisition premium refers to the portion of the value paid by the acquirer company to the shareholders of the target company that is higher than its market price in order to acquire the equity of the target company.
Acquisition premium
Right!
The acquisition premium refers to the portion of the value paid by the acquirer company to the shareholders of the target company that is higher than its market price in order to acquire the equity of the target company.
- Name
- Acquisition premium
- Purpose
- The acquirer company acquires equity in the target company
- Features
- Above its market price
- Nature
- Partial value
definition
According to western countries' M & A theory, the main reason why the M & A company pays the premium to the target company in corporate mergers and acquisitions is mainly due to the development prospects of the target company and the synergies generated after the merger.
