Cash Mergers

A cash merger occurs when one company acquires another by paying cash for its shares, rather than using stock or other forms of payment. In this scenario, the acquiring company offers shareholders of the target company a set amount of cash per share, allowing them to sell their ownership instantly. This strategy is often attractive because it offers immediate value to shareholders and simplifies the transaction. Cash mergers can signal confidence from the acquirer, as they are willing to use their own cash reserves to buy another business outright.