All-Cash Deal

The term all-cash deal refers to a purchase which is made in cash rather than through in debt or equity.

The term is often used in reference to mergers and acquisitions in which the acquiring company purchases the shares of the target company from its shareholders in cash. The target company’s balance sheet equity is not affected, but its ownership is transferred from its shareholders to the acquiring company.

When shareholders agree to an all-cash deal, they relinquish their ownership in the target company in exchange for a cash buyout. Acquiring companies may also offer a combination of cash and shares in their own stock.

In an all-stock deal, acquiring companies offer target company shareholders shares in their own stock in exchange for their shares. The target company shareholders become shareholders of the acquiring company.

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