What it means
According to an advisory in my Interactive Broker's account: DD is acquiring DOW at the rate of .7615 shares of DD per share of DOW. It is an all stock deal (no cash).
That is equivalent to the 1:1.28 stock ratio they announced? I admit I am not quite sure how to calculate this.
It's no cash since neither have cash? Though in general there have been complaints that corporations are still hoarding cash since the recession.
Or does a stock only deal indicate other items of interest?
It doesn't have to indicate anything about the total amount of cash either company has just that neither set of shareholders is going to get any direct payment for the merger (theoretically they'll both benefit from the increased profit margins of the combined company).
According to google finance Dow has 1.16B shares outstanding and Dupont has 876M. 876*1.28 = 1.12B shares in the new company controlled by former Dupont shareholders and 1.16*1 = 1.16B shares in the new company controlled by current Dow shareholders. That's close enough I wonder if the intent was for a 50/50 split between the former owners of the two companies (share counts tend to fluctuate based on buy backs and employees exercising options and the numbers on google finance might be out of date.).
