Accretive Acquisition

An acquisition that will increase the acquiring company's earnings per share (EPS). These acquisitions tend to be favorable for the company's market price because the price paid by the acquiring firm is lower than the boost the new acquisition will provide to the acquiring company's EPS. 

As a general rule, an accretive merger or acquisition occurs when the price-earnings (P/E) ratio of the acquiring firm is greater than that of the target firm.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Accretive —    A company is described as being accretive if it achieves growth through internal expansion or acquisition. * * * accretive UK US /əˈkriːtɪv/ adjective FORMAL ► making the amount, level, or value of something gradually increase: accretive to… …   Financial and business terms

  • Accretive — The process of accretion, which is the growth or increase by gradual addition, in finance and general nomenclature. An acquisition is considered accretive if it adds to earnings per share. In corporate finance, accretive acquisitions of …   Investment dictionary

  • Dilutive Acquisition — A takeover transaction that will decrease the acquirer s earnings per share (EPS) if additional shares are issued to pay for the acquisition. Dilutive acquisitions decrease shareholder value and should thus be avoided, unless the strategic value… …   Investment dictionary

  • Accretion (finance) — In finance, accretion is the change in the price of a bond bought at a discount to the par value of the bond [ [http://financial dictionary.thefreedictionary.com/accretion Accretion definition on the financial dictionary] ] .Accretion, in a… …   Wikipedia

  • GSI Commerce — Infobox Company name = GSI Commerce company type = Public (NASDAQ: [http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GSIC selected=GSIC GSIC] ) foundation = 1995 location city = King of Prussia, Pennsylvania location country = United States… …   Wikipedia

  • Capitalization Change — A modification in the issued and outstanding securities of a company. Capitalization changes occur either through the issuance of additional shares or the repurchase or cancellation of existing shares. This can have a dilutive or accretive effect …   Investment dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.