401Ks and mergers

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Beton24n2011
Posts: 3
Joined: Thu Jul 13, 2017 9:16 pm

401Ks and mergers

Post by Beton24n2011 » Thu Jul 13, 2017 9:25 pm

I'm currently working for a fortune 100 company that is merging with another. Upon completion of the merger, I will recieve 1.82 shares of the new company stock for every 1 share I own in my current company. Can someone walk me through what that process looks like and ultimately what the net result will be financially to my 401K account?

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unclescrooge
Posts: 1429
Joined: Thu Jun 07, 2012 7:00 pm

Re: 401Ks and mergers

Post by unclescrooge » Thu Jul 13, 2017 9:42 pm

It should have no effect on your 401k, because you should NOT have any company stock in your 401k to begin with.

alex_686
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Joined: Mon Feb 09, 2015 2:39 pm

Re: 401Ks and mergers

Post by alex_686 » Thu Jul 13, 2017 9:51 pm

On merger date you should see 2 translations. A outgoing transaction of your old shares. Sometimes this is coded as a sell. On the same date you should see a inbound transaction of shares, your old company shares times 1.82. Sometimes this is coded as a buy. Or maybe a exchange. Really the language does not matter.

Beton24n2011
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Joined: Thu Jul 13, 2017 9:16 pm

Re: 401Ks and mergers

Post by Beton24n2011 » Sat Jul 15, 2017 8:18 pm

just for the record to the previous post about not owning company stock...I've bought my company stock for over 5 years...it has performed just below 14% 5 year average and almost always pays a quarterly dividend. I plan on dumping the company stock as soon as the stock conversion takes place post merger...I do agree with you though...no more company stock for me..I guess what I'm asking is how do they determine the value of the new stock share...I'm assuming that from a value standpoint I won't gain or lose anything....? Just looking for advice on what to expect...and also...its 1.282 vs. the previously 1.82..not that it changes the question any

bberris
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Joined: Sun Feb 20, 2011 9:44 am

Re: 401Ks and mergers

Post by bberris » Sun Jul 16, 2017 1:02 pm

Is the "new" stock already trading? If it's really new, hard to say. No company decides the prices of their stock; buyers and sellers do that. The merger proxy statement should tell you something. And in theory, a merger by stock swap shouldn't change the total value any.

Beton24n2011
Posts: 3
Joined: Thu Jul 13, 2017 9:16 pm

Re: 401Ks and mergers

Post by Beton24n2011 » Mon Jul 17, 2017 12:53 pm

The company we are merging with is already trading...the merged company will share both names then eventually spin off into 3 separate companies...

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