You would use stock to buy a company if your stock price is trading quite high relative to the target. This could be because of temporary cyclical trends or circumstances. You would also use stock if there is no further cash or debt capacity and equity is the only option. Finally, you would lean towards using a stock exchange in a merger-of-equals to give the target shareholders ownership in the new combined company.
When would you use stock to buy a company?
Published On - March 22, 2023
