Stock Watch: Sanofi, Pfizer And The Aftermath Of Acquisitions

When one public company acquires another the conventional wisdom is that the stock prices of acquired and acquirer move in different directions.

The most logical move is for the acquired company’s valuation to jump to reflect the acquisition premium paid by the acquirer. This premium is also called the control premium because it includes the value paid by the acquirer – that is more than the market capitalization of the acquired – to control the target