What happens to your stocks when a company merges with another?

Question

For example: if you owned stock in Ford Motor Co. and they did merge with Toyota - what would happen to your stock? Would you now own the equivalent stock in Toyota, or would they buy you out?

Answer 1

If it's a true merger you'll typically be issued stock in the new company which may or may not be on a 1 for 1 basis. In your example Toyota shareholders might receive 1.1 shares of stock in the new company and Ford shareholders might only receive .9 shares. It's not that the previous Ford shareholders are being cheated. It's just their relative ownership in the new company. If it's a buy out, the shareholders would have a vote to accept or decline the offer. If the majority votes to accept the offer of the buying company, all shares would be tendered at that price.
Hope this helps.

Answer 2

You still own the company, of course. Unless you decide to sell your shares before the merger is completed. After that, the companies might change their name. Like when Daimler merged with Chrysler.

Answer 3

Depends on the merger, look at what that moron "Carly Fiorina" did to "Hewlett Packard", destroyed a great computer company by merging it with real crap "Compact computers", why did she do that ? just so she could say that she did, she destroyed the stockholders, and employee's, then bailed out on a golden Parachute !

Answer 4

There are several possibilities. But whatever it is, in such a case, just sell your stock after the price has jumped.

Answer 5

in case you own the paying for business employer, no longer something happens. in case you own the business employer being offered frequently you could settle for shares of inventory in the paying for business employer with greenback value equivalent to the obtained business employer inventory's final value.

Answer 6

They's either trade you new shares for old, or offer to buy you out.

Answer 7

Less shares