Meritor (NYSE:MTOR) stock is on the move today as investors react to news about an acquisition deal with Cummins (NYSE:CMI).
Let’s dive into that news below to see why shares of MTOR stock are rising higher on Tuesday!
- The big news here is that Cummins is acquiring Meritor in a deal worth $3.7 billion.
- This has Cummins agreeing to pay $36.50 in cash for each share of MTOR stock.
- That represents a 47.9% premium over the stock’s closing price on Friday.
- Cummins is acquiring Meritor for its experience with axle and brake technology.
- It wants to integrate this with its own powertrain solutions to serve combustible and electric vehicles (EVs).
- The company says this is the right time for the deal as it expects eAxles will be a critical integration point for hybrid and electric drivetrains.
- Cummins also notes that it expects the acquisition to be immediately accretive to its adjusted EPS.
- It also expects the deal “to generate annual pre-tax run-rate synergies of approximately $130 million” three years after closing.
- The Board of Directors of Meritor has given its unanimous support to the acquisition deal with Cummins.
- It’s also advising all shareholders to vote in favor of the deal.
- Meritor and Cummins are expecting the acquisition agreement to close by the end of the year.
- 7 Stocks to Buy After Sentiment Slipped to Lows
MTOR stock is seeing incredibly heavy trading today alongside news of the agreement. As of this writing, more than 9 million shares of the stock have changed hands. To put that in perspective, the company’s daily average trading volume is closer to 496,000 shares.
MTOR stock is up 45.3% as of Tuesday afternoon.
Investors on the lookout for more stock market news today are in the right place!
InvestorPlace has all the latest stock market happenings that traders need to know about for Tuesday! A few examples include new price predictions for Home Depot (NYSE:HD) stock, an upcoming event AMC Entertainment (NYSE:AMC) stockholders need to know about, as well as what analysts are saying about DraftKings (NASDAQ:DKNG) stock. You can find all of this news at the links below!
More Tuesday Stock Market News
- Is HD Stock a Buy Right Now? 3 Analysts Weigh In on Home Depot Price Predictions.
- Dear AMC Stock Fans, Mark Your Calendars for March 1
- Is DKNG Stock a Buy Right Now? 4 Analysts Weigh In on DraftKings.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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