Know what a deal pays you. Read a merger agreement and the goodwill it leaves behind.
Every class teaches one idea, asks you three questions on it and then puts it to work on a real company.
This course assumes Intro to Equity Compensation. Start here anyway if you like.
An acquisition is one company buying all of another company's shares at an agreed price, so the bought company stops trading and becomes part of the buyer.
Start this classIn a cash deal you get a fixed number of dollars per share, and in a stock deal you get a fixed number of the buyer's shares, so the value of a stock deal moves with the buyer's share price until closing.
Start this classA merger payout is what each target share turns into at closing: the share is canceled and converted into the right to receive the agreed cash, stock or both, which your broker then delivers to your account.
Start this classAn option is paid its spread at the deal price or converted into a buyer option. One with a strike above the deal price usually gets nothing.
Start this classA tender offer is a public offer by the acquirer to buy shares directly from the target's shareholders at a set price, open for a fixed period, instead of waiting for a shareholder vote.
Start this classAn earnout is a part of the purchase price that the buyer pays later, and only if the acquired business hits a target written into the deal, such as a sales figure or a regulatory approval.
Start this classA merger agreement is the contract in which the buyer and the target fix the price, the promises each side makes, the conditions for closing, the deadline, and what happens if either side walks away.
Start this classA signed deal can still fail. The breakup fee clauses tell you who carries which risk and what losing costs.
Start this classGoodwill is the amount an acquirer paid above the fair value of everything it can identify and measure in the company it bought, recorded as an asset on the buyer's balance sheet.
Start this classA goodwill impairment is a charge an acquirer takes when its annual test shows the acquired business is now worth less than the value carried on its balance sheet, so the goodwill is written down and the loss hits profit.
Start this classThis one comes from How mergers and acquisitions work.
In an acquisition, what is the target company?
The target is the company whose shares are being bought. After closing it usually survives as a subsidiary the acquirer owns outright.
The final draws 12 questions from a bank of 30. Get 10 right to pass.
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See how certificates workEvery figure below was read from the filing itself on sec.gov on October 27 2026: the 8-K, its exhibits, the proxy statement, or the XBRL-rendered note in the 10-Q. SEC figures do not expire. Figures in millions of US dollars unless stated.
| Company | Date or period | Figure | Value | Filing and section | Concept checked |
|---|---|---|---|---|---|
| Whole Foods Market | Jun 15 2017 | Merger consideration | $42.00 per share in cash | Form 8-K filed Jun 16 2017. Item 1.01 | Per-share price. Cash deal |
| Whole Foods Market | Jun 16 2017 | Headline deal value | About $13.7 billion including Whole Foods' net debt | Press release. Exhibit 99.1 to the same 8-K | Deal value |
| Whole Foods Market | Jun 15 2017 | Termination fee owed by Whole Foods | $400 million, in specified cases including a change of board recommendation | Form 8-K filed Jun 16 2017. Item 1.01 | Termination fee |
| Whole Foods Market | Aug 23 2017 | Shareholder vote for the merger | 229,534,195 shares, 71.68% of shares outstanding | Form 8-K filed Aug 28 2017. Item 5.07 | Shareholder vote |
| Whole Foods Market | Aug 28 2017 | Aggregate consideration paid to shareholders | About $13.55 billion | Form 8-K filed Aug 28 2017 | Closing |
| Whole Foods Market | Derived | Shares paid out | derived: 13,550 divided by $42.00 is about 322.6 million | from the two rows above | Labelled derived in day 1 |
| Whole Foods Market | Derived | Signing to closing | derived: Jun 15 to Aug 28 2017 is 74 days | dates above | Labelled in days 1 and 7 |
| Activision Blizzard | Jan 18 2022 | Offer price and deal value | $95.00 per share in cash. $68.7 billion inclusive of net cash | Press release. Exhibit 99.1 to the Form 8-K filed Jan 18 2022 | Per-share price |
| Activision Blizzard | Jan 14 2022 | Premium to the closing price | About 45.3% | DEFM14A dated Mar 21 2022. Letter to stockholders and summary | Acquisition premium. Unaffected share price |
| Activision Blizzard | 30 trading days ended Jan 14 2022 | Premium to the volume-weighted average price | About 50.3% | same proxy | VWAP |
| Activision Blizzard | Derived | Implied unaffected price | derived: $95.00 divided by 1.453 is about $65.38. $95.00 divided by 1.503 is about $63.21 | from the premiums above. The proxy states percentages only | Labelled derived in day 2 |
| Activision Blizzard | Mar 21 2022 | Termination fee owed by Activision | $2,270.1 million | same proxy | Termination fee. Derived 2,270.1 divided by 68,700 is about 3.3% |
| Activision Blizzard | Mar 21 2022 | Special meeting date | Apr 28 2022 | same proxy | Used in the final |
| Slack Technologies | Dec 1 2020 | Merger consideration | $26.79 in cash plus 0.0776 of a Salesforce share | Form 8-K filed Dec 1 2020. Agreement Section 2.1(a)(i) | Mixed consideration. Fixed exchange ratio |
| Slack Technologies | Nov 30 2020 | Enterprise value | About $27.7 billion, on Salesforce's Nov 30 2020 close | Press release. Exhibit 99.2 to the same 8-K | Implied deal value |
| Slack Technologies | Nov 24 2020 and Jan 28 2021 | Implied value per Slack share | About $47.03 and about $44.37 | DEFM14A dated Jan 29 2021. Letter to stockholders | Implied deal value |
| Slack Technologies | Derived | Stock part and implied Salesforce price | derived: 47.03 minus 26.79 is 20.24, divided by 0.0776 is about $260.82. 44.37 minus 26.79 is 17.58, divided by 0.0776 is about $226.55. Fall of $2.66, about 5.7% | from the rows above | Labelled derived in day 3 |
| Slack Technologies | Dec 1 2020 | Treatment of employee awards | Employee options and RSUs assumed and converted into Salesforce awards, same terms including vesting | Form 8-K filed Dec 1 2020 | Award conversion |
| Slack Technologies | Dec 1 2020 | Option conversion formula | Shares multiplied by the option conversion ratio, rounded down. Exercise price divided by it, rounded up to the cent | Agreement Section 2.3(b). Exhibit 2.1 | Option assumption. The ratio's value is not used in the course |
| Broadcom and VMware | Oct 30 2023 | Election terms | $142.50 in cash or 0.2520 of a Broadcom share per VMware share, 50% cash and 50% stock overall | Joint press release. Exhibit 99.1 to the Form 8-K filed Oct 30 2023 | Cash election. Stock election |
| Broadcom and VMware | Oct 30 2023 | Election results | About 96% elected stock. About 4% elected cash or made no election | same release | Proration |
| Broadcom and VMware | Oct 30 2023 | Proration of stock electors | About 52.1% stock and about 47.9% cash per share | same release | Proration. Derived 96% times 52.1% is about 50% |
| Broadcom and VMware | Derived | Payout on 1,000 shares electing stock | derived: 521 times 0.2520 is about 131.3 Broadcom shares. 479 times $142.50 is $68,257.50 | from the rows above | Labelled derived in day 4 |
| Broadcom | Nov 22 2023 | Closing and borrowing | Closed Nov 22 2023. Borrowed $28,390,625,000 under the August 2023 credit agreement | Form 8-K filed Nov 22 2023 | Closing. Right to receive |
| Apr 25 2022 | Merger consideration | $54.20 per share in cash | Form 8-K filed Apr 26 2022. Agreement Section 3.1(c), Exhibit 2.1 | Per-share price | |
| Apr 25 2022 | Treatment of RSUs | Vested and unvested RSUs canceled for $54.20 per unit in cash. Unvested cash vests and is payable when the RSU would have vested, subject to continued service | Agreement Section 3.6(d) | Cash replacement award. Continued-service condition | |
| Apr 25 2022 | Treatment of options | Vested and unvested options canceled for the spread over $54.20, unvested on the original schedule. Options at or above $54.20 canceled without payment | Agreement Section 3.6(a) | Option cash-out. Underwater | |
| Apr 25 2022 | Financing | Equity up to about $21 billion. Debt about $13 billion. Margin loans about $12.5 billion | Form 8-K filed Apr 26 2022. Item 1.01 | Financing commitment. Derived total $46.5 billion | |
| Apr 25 2022 | Termination fees | $1.0 billion each way, in specified circumstances | same 8-K. Agreement Article I definitions | Termination fee | |
| Apr 25 2022 | Outside date | Oct 24 2022, extendable by six months for certain clearances | same 8-K. Item 1.01 | Outside date | |
| Apr 25 2022 | Agreement layout | Conditions in Sections 7.1 to 7.3. Specific performance in Section 9.9 | Agreement table of contents. Exhibit 2.1 | Closing conditions. Specific performance | |
| Elon R. Musk | Jul 8 2022 | Notice of termination | Letter notifying Twitter he was terminating the merger agreement | Schedule 13D Amendment No. 9. Item 4 | Used in day 9 |
| Jul 12 2022 | Lawsuit | Verified complaint in the Delaware Court of Chancery seeking specific performance | Exhibit 99.1 to the Form 8-K filed Jul 12 2022 | Specific performance | |
| Oct 27 2022 | Closing | Each share converted into the right to receive $54.20 in cash | Qatar Investment Authority. Schedule 13D Amendment No. 1 filed Oct 28 2022 | Closing | |
| Johnson & Johnson and Abiomed | Nov 1 2022 | Offer and value | $380.00 per share in cash plus a CVR of up to $35.00. Enterprise value about $16.6 billion. Tender offer | Joint press release. Exhibit 99.1 to the Form 8-K filed Nov 1 2022 | Tender offer |
| Johnson & Johnson and Abiomed | Nov 1 2022 | CVR milestones | $17.50 if Abiomed product sales exceed $3.7 billion in J&J fiscal Q2 2027 to Q1 2028, or $8.75 if met later through Q1 2029. $7.50 for FDA approval in certain STEMI patients by Jan 1 2028. $10.00 for a first Class I recommendation no later than Dec 31 2029 | same release | Contingent value right. Milestone payment. Derived total $35.00 |
| Johnson & Johnson | Dec 21 and 22 2022 | Tender results and completion | About 25,759,195 shares tendered, about 57.1% of shares then outstanding. Expired 11:59 pm Dec 21. Completed Dec 22 2022 | Press release. Exhibit 99.1 to the Form 8-K filed Dec 22 2022 | Minimum tender condition. Second-step merger |
| Johnson & Johnson | Derived | Shares outstanding and timing | derived: 25,759,195 divided by 0.571 is about 45.1 million. Nov 1 to Dec 22 is 51 days | from the rows above | Labelled derived in day 7 |
| Bristol-Myers Squibb | Jan 2 2019 | Celgene merger consideration | $50.00 in cash, one BMS share and one CVR per Celgene share. CVR pays $9.00 on FDA approvals | Form 8-K dated Jan 4 2019 | Contingent value right |
| Bristol-Myers Squibb | Jan 2 2019 | Termination fees | $2.2 billion each way | same 8-K | Termination fee. Not used in a class |
| Bristol-Myers Squibb | Jan 1 2021 | CVR termination | Liso-cel not approved by Dec 31 2020. CVR agreement terminated, no payment. CVRs no longer trade on the NYSE | Form 8-K dated Jan 4 2021 | Earnout |
| Adobe | Sep 15 2022 | Figma consideration | About $10 billion in cash and about $10 billion in Adobe shares. $22.4795 in cash plus 0.045263 of an Adobe share per Figma share | Form 8-K filed Sep 15 2022 | Mixed consideration |
| Adobe | Sep 15 2022 | Reverse termination fee and outside date | $1 billion in cash on antitrust failure. Initial outside date Sep 15 2023 with two three-month extensions | same 8-K | Reverse termination fee. Derived 1 divided by 20 is 5% |
| Adobe | Dec 17 2023 | Termination | Mutual termination agreement. $1 billion paid to Figma within three business days. No clear path to European Commission approval, UK CMA also named | Form 8-K filed Dec 18 2023, Exhibit 10.1 and the joint press release | Antitrust review. Breakup fee |
| Microsoft | Acquired Oct 13 2023 | Activision purchase price allocation | Cash 12,976. Goodwill 50,989. Intangible assets 21,969. Other assets 2,440. Long-term debt (2,799). Long-term income taxes (1,868). Deferred income taxes (4,678). Other liabilities (3,623). Total purchase price 75,406 | Form 10-Q for the quarter ended Mar 31 2024. Business combinations note, rendered statement R33. Closing date from Activision's Form 8-K of Oct 13 2023 | Purchase price allocation. Goodwill. Adds to 75,406 |
| Microsoft | Acquired Oct 13 2023 | Activision intangible assets | Marketing-related 11,619 over 24 years. Technology-based 9,689 over 4 years. Customer-related 661 over 4 years | same note | Acquired intangible assets |
| Microsoft | Derived | Goodwill share and net assets | derived: 50,989 divided by 75,406 is about 67.6%. 75,406 minus 50,989 is 24,417 | from the rows above | Identifiable net assets. Labelled derived in day 11 |
| Microsoft | Apr 25 2014 | Nokia Devices and Services consideration | $9.5 billion total consideration | Form 10-K for FY ended Jun 30 2014. MD&A | Purchase price |
| Microsoft | Q4 fiscal 2015 | Phone Hardware impairments | Goodwill $5.1 billion. Intangible assets $2.2 billion | Form 10-K for FY ended Jun 30 2015. Item 1A risk factors | Goodwill impairment |
| Microsoft | FY ended Jun 30 2015 | Totals | $7.5 billion goodwill and asset impairment charges. $2.5 billion integration and restructuring. $10.0 billion off operating and net income. $1.15 off diluted EPS. Up to 7,800 positions | same 10-K. Financial highlights footnote and Item 1A | Impairment charge. Restructuring charge. Derived 7.5 divided by 9.5 is about 79% |
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