Ecolab announced its intention to purchase Nalco on July 20, 2011. Ecolab agreed to pay $38.80 per share for Nalco, a 32 percent premium over Nalcos trading price. Seventy percent of the deal would be in stock, with Ecolab trading its own shares for Nalcos outstanding stock (0.7005 shares of Ecolab for each Nalco share outstanding, for a total of $3.8 billion). The other 30 percent of the purchase price would be a cash payment, for a total of $1.6 billion. Ecolab would also assume Nalcos $2.7 billion debt load.

Exhibit 3 shows how the market reacted to the announcement. Baker attributed the steep penalty for the Nalco offer to two factors. First, over his tenure Ecolab had focused on small, bolt-on acquisitions representing minor extensions of Ecolabs reach;¹⁸ the Nalco deal was the largest of Bakers career, and investors seemed to wonder if the two companies could be combined to create strategic value. Second, Baker felt that investors assumed that Ecolab must be in trouble, and hence overvalued, if they were making a play for a company like Nalco

EXHIBIT 3Ecolab Share Price, July 1822, 2011

Date	Open	Volume
July 22, 2011	51.6335	11746873
July 21, 2011	51.3177	12081296
July 20, 2011 (Announcement date)	49.4043	23175092
July 19, 2011	47.7603	1225653
July 18, 2011	49.3393	1364653

Show the number of shares outstanding after acquisition?

Show the number of shares outstanding after dilution of shares?