updating recording-merger.md

docs/en/how-to/recording-merger.md

@@ -2,14 +2,22 @@
 title: How to record a merger or acquisition?
 ---
 
-A merger occurs when two separate companies combine forces to create a new organization. An acquisition refers to the takeover of one company by another. According to [Investopedia](https://www.investopedia.com/ask/answers/021815/what-difference-between-merger-and-acquisition.asp), both terms have become increasingly blended.
+A merger occurs when two separate companies join forces to form a new organisation, whereas an acquisition involves one company taking over another. As explained by [Investopedia](https://www.investopedia.com/ask/answers/021815/what-difference-between-merger-and-acquisition.asp), the distinction between these two terms has become increasingly blurred.
 
-Exxon Corp. and Mobil Corp. completed their merger in November 1999. Exxon shareholders owned 70 per cent of the new company. Mobil shareholders are left with 30 per cent of the merged group.
+On Saturday, 16 January 2021, the merger between Peugeot S.A. (PSA) and Fiat Chrysler Automobiles N.V. (FCA) was finalised, leading to the creation of Stellantis N.V. (STLA). Figure 1 shows historical price data for the companies involved, downloaded from XETRA via PortfolioReport, with the respective ISIN numbers: FCA (NL0010877643), PSA (FR0000121501), and Stellantis (NL00150001Q9).
 
-This corporate action could be recorded in PP as an outbound/inbound delivery. Suppose that you owned 10 Exxon and 50 Mobile shares. This will result in (10 x 0.7) + (50 x 0.3) = 7 + 15 or 22 shares of ExxonMobil Corp.
+Figure: Historical prices for Fiat, Peugeot, and Stellantis from 2020-07-01 to 2021-07-01. {class=pp-figure}
 
-- Transaction 1: outbound delivery of 10 Exxon shares 
+![](./images/record-merger.png)
 
-According to [Reuters](https://www.reuters.com/markets/deals/unipol-gruppo-makes-buyout-offer-valuing-unipolsai-82-bln-2024-02-16/), the Italian financial group Unipol announced on February 16, 2024 an offer to acquire the remaining 14.75% stake in UnipolSAI. Unipol Gruppo is offering 2.7 euros per share to buy out UnipolSAI shareholders, or alternatively, UnipolSAI shareholders can exchange 10 shares of UnipolSAI for 3 shares of Unipol Gruppo.
+The compensation for the old shareholders in the Stellantis merger was: 
 
-From the respective websites ([Unipol Gruppo](https://www.unipol.it/en/investor/share-information) and [UnipolSAI](https://www.unipolsai.com/en/investors/share-information)) we know that the closing price on February 15 was € 5.74 for Unipol Gruppo and € 2.4/share for UnipolSAI.  were: 
+- Each FCA shareholder received 1 Stellantis share for every FCA share they held.
+- Each PSA shareholder received 1.742 Stellantis shares for every PSA share they held.
+
+As shown in Figure 1, the closing prices of the companies on the day before the Stellantis merger were: FCA at €12.68 and PSA at €22.07. Based on the compensation ratio, the PSA price was expected to be 1.742 × FCA Price, or €12.68 × 1.742 = €22.09, which nearly matches PSA’s closing price of €22.07. Stellantis had a positive debut on European stock markets following the merger, with shares rising by 8% on the first trading day, from €12.68 to around €13.60.
+
+Recording this merger in Portfolio Performance is straightforward, as it involves creating a new security. To update your portfolio:
+
+1. Sell the FCA and PSA shares at their respective prices.
+2. Buy the Stellantis (STLA) shares. The number of Stellantis shares purchased is calculated as 1.742 × FCA shares + PSA shares. Since fractional shares cannot be traded, your broker will likely round down the number of Stellantis shares, leaving a small cash surplus in your deposit account.