What Does Realty Income's Merger With VEREIT Mean for Investors?

When bull markets get into their later stages, many companies start to focus on mergers and acquisitions as ways to obtain growth, often using their own shares as currency. This can result in big strategic deals like the one in which Realty Income (NYSE: O) is buying VEREIT (NYSE: VER) in an all-stock transaction.

Here's what this deal (announced on April 29) means for these real estate investment trusts' shareholders.

Investors will receive 0.705 shares of Realty Income for every share of VEREIT they hold. Immediately after the merger transaction closes, the combined company will spin off all of its office property assets in a new company, which will be a taxable event for shareholders. So, if you are a VEREIT shareholder, after the transaction closes, you will own shares of Realty Income and shares of a second entity that owns the office property assets.

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Source Fool.com