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Home > QFINANCE Dictionary > Definition of merger arbitrage

Definition of

merger arbitrage

Mergers & Acquisitions

trading securities of merging companies simultaneously in a merger, a hedge fund trader sells short the high-priced securities of the target company and buys the underpriced ones of the acquiring company, and then at a time when prices have reverted to true value, the trade can be liquidated at a profit

Definitions of ’merger arbitrage’ and meaning of ’merger arbitrage’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’merger arbitrage’ and other financial terms with our online QFINANCE Financial Dictionary.

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