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Explain announcement of the acquisition

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On 25 August 2006, Belgacom announced it reached an agreement to buy in cash the remaining 25% stake in Belgacom Mobile (Proximus) that Vodafone owned, for a total amount of EUR 2 billion. Belgacom had so far no leverage and this announcement was very well received by the market as the share price increased by 0.92 % the same day and 9.8% over the following month, while the Belgian BEL20 index decreased respectively by 0.03% on the announcement day and increased only by 3% over the following month.

Why did the share price increase following the announcement of the acquisition?

Reference no: EM132694425

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