M&A Mania: Everyone Buys Everyone and the Market Marches Higher

Source: Thinkstock

Source: Thinkstock

M&A activity has been extremely strong over the past few months with Reynolds American (NYSE:RAI) buying Lorillard (NYSE:LO) and Tyson (NYSE:TSN) buying Hillshire Brands (HSH). On Monday, we saw this continue as Zillow (NASDAQ:Z) bought Trulia (NYSE:TRLA) and Dollar Tree (NASDAQ:DLTR) bought Family Dollar (NYSE:FDO).

Zillow Buys Trulia

Zillow and Trulia are the two market leaders in the online real estate market. Real estate agents can list properties for sale and rent while prospective buyers can search for homes to buy and rent. They also provide insight into the market. For instance, you can find out the past prices that a particular home has sold for, the general trends in local real estate markets, the annual tax rate, the quality of the local schools, and more.

According to the announcement, Zillow is buying Trulia in an all-stock deal.   While the two companies are combining forces, both brands will remain in existence.

Trulia shareholders will receive 0.444 shares of Zillow for each share of Trulia that they own. Trulia shares soared to as high as $64/share on the announcement, up from Friday’s $56/share close. However, most of the move higher occurred on Thursday when rumors of a deal first hit Wall Street. The stock is up over 50 percent in the past few days. Zillow shares fell nearly 5 percent on the news, but they rose on the rumor and are up 18 percent since the rumor went public.