WHAT IS 'Package Deal'

A package deal is an order that contains a number of exchange or deposit items that must be completed simultaneously, or not at all. Package deals allow traders to ensure specific prices or times to maturity for multiple assets.

BREAKING DOWN 'Package Deal'

A package deal may be the best choice for traders in properly executing an investment strategy. For example, let's say an investor wants to enter into a long-short strategy, where he or she purchases one stock and short-sells another. Making this order a package deal will protect the investor in case either stock is not immediately available for purchase or sale. The investor may not want the exposure of being only long or short for the period of time required to complete the second transaction.

Example of Package Deal

A package deal contract can also be used to attract potential investors in large-scale construction projects that would benefit a local economy. For instance, the Investment Development Authority of Lebanon (IDAL) offers a package deal contract with investor incentives. They offer investment incentives based on an investment project's potential capital investment, the number of jobs created, and the project’s sector type. In IDAL's package deal contract, an investor is promised incentives including a) full exemption from: corporate income tax for a period that can run up to 10 years, project dividends taxes for a period that can run up to 10 years, and land registration fees, b) up to 50 percent reduction on work- and residence- permit fees as well as construction-permit fees, and c) getting work permits with no delay.

Another example of a package deal is a recent agreement in the tech industry. In 2017, TechCrunch reported that Uber agreed to move forward with a SoftBank Group investment, stating that they "entered into an agreement with a consortium led by Softbank and Dragoneer on a potential investment.” This is an example of a package deal, but SoftBank’s $1 billion investment relies on the tender offer going through final rounds of greenlighting. TechCrunch further reported that the “potential deal includes a $1 billion investment in the company at the last private valuation of nearly $70 billion,” with a source suggesting the deal is an extension of its last Series G round. TechCrunch  says that observers expect the group to buy “up to $9 billion in Uber shares from employees and other shareholders,” which would bring its “total ownership to at least 14 percent of the company.”

  1. Stimulus Package

    A stimulus package is a package of economic measures put together ...
  2. Intermarket Spread

    An intermarket spread involves purchasing long futures in one ...
  3. Maturity

    Maturity refers to a finite time period at the end of which the ...
  4. Term Deposit

    A term deposit is a deposit held at a financial institution that ...
  5. Long-Short Ratio

    A long-short ratio represents the amount of a security available ...
  6. Order

    An order is an investor's instructions to a broker or brokerage ...
Related Articles
  1. Retirement

    Should You Accept an Early Retirement Offer?

    Is it wise to accept an early retirement package? Here's what you need to consider.
  2. Investing

    UPS to Modify Dimensional Weight Calculations (UPS)

    Starting Jan. 8, packages larger than 1,728 cubic inches will be subject to a price increase.
  3. Investing

    Why Product Sizes Are Shrinking (And What You Can Do About It)

    More companies are using creative packaging to offset rising production costs. But ultimately consumers end up paying the price. Find out what you can do to avoid paying more for less.
  4. Investing

    UPS Stock: An Earnings Case Study

    Check out the analysis of earnings for United Parcel Service, including historical earnings, past analyst estimates and future analyst estimates.
  5. Investing

    Amazon Eyes Boxes in Effort to Cut Shipping Costs

    Aiming to cut costs, Amazon is trying to reduce the number of boxes used to deliver products.
  6. Investing

    Pepsico Makes a Deal to Improve Sustainability

    Like many packaged goods brands, PepsiCo (NYSE: PEP) is making an effort to show that it's working on shifting to environmentally responsible packaging. In October, the company released a long-term ...
  7. Financial Advisor

    Simplify Your Portfolio

    Faced with an overabundance of choices, many investors forget to stick to the basics.
  8. Investing

    The Roles of Traders and Investors

    Discover how these two groups work together to keep the market functioning properly.
  9. Investing

    Minimize Your Losses With Alternative Strategy Funds

    Discover a strategy that can be used to participate in the market and still protect the downside.
  1. The difference between a market order and limit order

    Market orders execute a trade to buy or sell immediately at the best available price. A limit order only trades when the ... Read Answer >>
  2. Why do limit orders cost more than market orders?

    Learn the difference between a market order and a limit order, and why a trader placing a limit order pays higher fees than ... Read Answer >>
Hot Definitions
  1. Discount Rate

    Discount rate is the interest rate charged to commercial banks and other depository institutions for loans received from ...
  2. Economies of Scale

    Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger ...
  3. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  4. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  5. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
  6. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
Trading Center