Definition: is a type of transaction, during which the buying firm purchases the target company’s stock with cash, thus, avoiding the traditional route of exchanging it with its own stock. Such mergers oftentimes occur when the owners of the target organization want to avoid being identified with the enterprise that will result from the buy-out. In other cases, cash mergers happen when the purchasing company is substantially larger than the target firm. Alternatively, such a process can be defined as a cash-out merger.
In a Sentence:
The merger negotiations were progressing rather slowly, but when IT Magnitude offered a cash merger, Tycon Hill’s shareholders agreed to make a deal.
The only possible solution was to offer them a cash merger, as they don’t want to be associated with a company that is selling cigarettes.
The director of Flying Safely made it clear that if we can’t find enough money for a cash merger, he’ll look for another buyer.
Synonyms and related words: merger, cash-out merger, all-cash deal, acquisition