Dilutive Acquisition

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Dilutive Acquisition

An acquisition that reduces a publicly-traded company's earnings per share. A dilutive acquisition occurs when the price-earnings ratio of the acquiring firm is less than that of the target firm. A dilutive acquisition usually results in a lower share price for the target company. See also: Accretive acquisition.
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Additionally, operating profitability in fiscal 2017 was negatively affected by the five dilutive acquisitions that were not included in the budget.
Excluding the five acquisitions, operating EBITDA margin improved to 7.8% in fiscal 2017, but only modestly improved to 7.3% on a consolidated basis including the five dilutive acquisitions. Fitch's analysis excludes non-recurring pension termination expenses in fiscal years 2016 and 2017.
Dilutive acquisitions are a big no-no to Wall Street.