illustrates the basic principle behind the merger of two entities. It is common knowledge that a merger will always be accretive is the target's price-earnings-ratio ('PER') is lower than the buyer's PER.
Think of PER as a reverse yield on the business - intuitively, buying a company with a higher income yield will always make a good deal for shareholders of the buyer.
In reality, not all target companies have lower PER than the acquirer. In some cases, the target company's PER could be marginally lower, which dilutes the effect of accretion. And if the deal can be funded with bank debt, this will also help improve the case for an earnings accretive acquisition.
See the spreadsheet below in which company A is the buyer and company B is the target.