BAE-EADS merger calculator

A merger is like any acquisition: what matters for the shareholders of the acquiring company is whether the value of the annual synergies covers the premium paid to the target company.

This interactive tool helps with that calculation. The bid premium is the difference between the undisturbed market capitalisation and the current market capitalisation of BAE. This will move with the share prices of both companies.

The net present value of synergies is derived from your estimates of annual synergies, tax rate, and synergy multiple. If this NPV is bigger than the bid premium, the deal adds value for EADS shareholders. If lower, it does not. (Any premium is good for BAE shareholders.)