Evaluating a cross-border acquisition’s impact on earnings per share (EPS) requires a thorough financial analysis. First, assess the target company’s financials, including revenue, profitability, and debt. Determine the acquisition cost, funding structure, and potential synergies that may enhance earnings. Consider foreign exchange risks, tax implications, and regulatory constraints. Calculate the pro forma EPS by integrating projected earnings and additional shares issued. Compare the pre- and post-acquisition EPS to gauge dilution or accretion. Sensitivity analysis helps anticipate variations in financial performance. A well-structured evaluation ensures informed decision-making and shareholder value optimization.

Evaluating synergies and cost savings in a cross-border acquisition is important to determine the value and success of the deal. Accretion and Dilution represent a straightforward test used to assess how an acquisition or merger affects the purchasing firm's Earnings per Share (EPS). The Accretion-Dilution analysis assists the acquiring company in evaluating the impact of the merger, taking into account all relevant factors and complexities. a) Accretion Pro Forma (Post-Deal) EPS > Acquirer’s EPS b) Dilution Pro Forma (Post-Deal) EPS < Acquirer’s EPS c) Breakeven Pro Forma (Post-Deal) EPS = No Impact on Acquirer’s EPS For better perspective, read case studies on Tata Motor’s Acquisition of Jaguar and Land Rover

1. Understand the Financials of Both Companies *Pre-Acquisition EPS *Target Company’s Financials 2. Assess the Deal Structure (Cash vs. Stock vs. Mixed) 3. Determine the Pro Forma Combined Financials 4. Evaluate the Dilution or Accretion of EPS 5. Consider Foreign Exchange Impact 6. Incorporate Tax Implications 7. Adjust for Financing Costs (if applicable)