Dilutive Acquisition


A dilutive acquisition is used to describe a takeover that ends with the acquiring company or REIT ending up with lower earnings per share (EPS) than before the takeover.

In the context of REITs investments, a dilutive acquisition happens when a REIT acquires a property that reduces its distribution per unit (DPU).

Dilutive acquisitions are usually the result of ill-timed or miscalculated expansion attempts, although there are instances when these could be undertaken for strategic reasons.

The opposite of a dilutive acquisition is the accretive acquisition.

This entry is part of REITsWeek's glossary of REITs and real estate investment terms.


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