Merger Of Equals
Categories: Banking
See: Mergers and Acquisitions - M&A.
In an MOE, or merger of equals, companies simply...merge. Kind of the opposite of the way parameciums replicate.
Company A might have $100 million in revenues and $25 million in cash flow; Company B might have $90 million in revenues and $30 million in cash flow. One company is growing a bit faster than the other; one company is more strategically placed than the other. So rather than argue nits and nats, both companies decide to just call it halfsies and merge as equals.
The new income statement would show $190 million in revenues and $55 million in cash flow. Certainly makes them more powerful together than they were on their own. The shares outstanding, debts, and all the other tweeks get mashed up together into one big, fat, happy company. Think: The Brady Bunch.