How do you analyze accretion/dilution in an M&A deal from the acquirer's perspective?

measures whether a deal raises the acquirer's pro-forma EPS (accretive) or lowers it (dilutive).

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Pro-forma EPS = (Acquirer NI + Target NI + after-tax synergies − after-tax financing costs) / pro-forma share count
Accretion = Pro-forma EPS / standalone EPS − 1
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• Target earnings yield vs. acquirer cost of capital.
• Financing mix: cash pulls lost interest income out of the synergy pot, debt creates interest expense, stock dilutes via new shares.
• Synergy realization.

A stock deal with acquirer P/E > target P/E is accretive; a cash deal is accretive when the interest cost is below the target earnings yield. For investment-grade acquirers (cost of debt 4%, target earnings yield 8%), a cash deal delivers about 2–4% accretion in year 1.

goodwill amortization (local GAAP; IFRS is impairment-only), restructuring costs in years 1–2, FX translation.