Shotgun Wedding

Filed Under:
Dictionary Says

Definition of 'Shotgun Wedding'


A forced union of two companies or two jurisdictions that otherwise would not choose to merge. A government can force a shotgun wedding between two companies to prevent a shock to the economy, or between two cities or counties to prevent a local government from going bankrupt. While a shotgun wedding may not be pleasant for the parties involved, the resulting union is intended to serve the greater good.

Investopedia Says

Investopedia explains 'Shotgun Wedding'


In 2008, the U.S. government forced Bank of America to merge with Merrill Lynch to prevent the economy from declining further than it already had, as a result of the global financial crisis and the collapse of Lehman Brothers. BofA paid $29 per share for Merrill’s stock, which was trading around $17. The merger created the largest mortgage lender, retail brokerage, retail bank and credit card company in the United States.

Similarly, in 2012, new regulations from the Spanish government caused two of the nation’s banks, CaixaBank and Banca Civica, to merge in order to meet increased capital requirements amid investors’ concerns about toxic assets on banks’ balance sheets. The merger gave CaixaBank control of a significant percentage of Spain’s deposits, customer loans and total assets. 

In 2013, there was talk of merging Detroit, MI and Wayne County. Wayne County, despite a history of severe corruption, was more financially stable than neighboring Detroit. The idea behind the shotgun wedding was to rescue Detroit from its massive debts and imminent bankruptcy.

2013 also saw hints of a shotgun wedding between luxury department stores Saks Fifth Avenue and Neiman Marcus. Private-equity firm KKR wanted to force this merger, which would have created the U.S.’s second-largest luxury department store chain at a time when luxury companies were still struggling in the aftermath of the Great Recession. Ultimately, the deal did not happen, and Saks, the parent company of Saks Fifth Avenue, was acquired by Hudson's Bay Company in July 2013. 

comments powered by Disqus
Hot Definitions
  1. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  2. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  3. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  4. Momentum Investing

    An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
  5. Momentum Investing

    An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
  6. IPO ETF

    An exchange-traded fund that focuses on stocks that have recently held an initial public offering (IPO). The underlying indexes tracked by IPO ETFs vary from one fund manager to another, but index IPO ETFs are usually passively managed and contain equities that have recently been offered to the public.
Trading Center