Ecolab's shareholders stand to lose if the additional stock issued to complete the acquisition dilutes their earnings $($ a dilutive merger$).$ However, if the combined company has a positive growth outlook then we can say that the merger was accretive.

Exhibit $1,$ taken from Ecolab$$s $2011$ Annual Report, contained a Pro Forma Analysis of the Nalco Acquisition in terms of revenues and operating profits. Flesh out this column and estimate the Pro Forma Net Income. This can be done by subtracting the estimated Interest Expense and Income Tax Expense from Pro Forma Operating Income. As a rough estimate, you can add the interest expense of Ecolab in $2011($actual$)$ with Nalco in $2010($actual$).$

Estimate the impact of the merger on Ecolab's $2011$ Pro Forma earnings;

$1)$ Estimate the Pro Forma Net Income of the combined entity;

$2)$ Estimate the number of shares outstanding after the merger

$3)$ Estimate the number of new Ecolab shares issued as part of the merger.

What is the Pro Forma EPS?

Will the merger with Nalco be immediately accretive to Ecolab's shareholders? Does the structure of the deal mean that the criteria for a successful merger has been met?