Why would an acquisition be dilutive?

• Only when the acquirer funds the purchase entirely with cash, because spending cash on any acquisition always lowers combined EPS
• When a high-P/E buyer uses its stock to purchase a lower-P/E target, since issuing the pricier shares always reduces EPS
• Whenever cost or revenue synergies are present in the deal
• When the after-tax cost of the financing exceeds the earnings yield the target adds (e.g., low-P/E buyer, high-P/E target)
• Whenever the target is profitable, since paying for any positive earnings always dilutes the acquirer's per-share earnings after close