explain in economic terms, what a company, which is committed to increasing shareholder wealth, should look for when seeking to acquire another company?

When a company is committed to increasing shareholder wealth and is seeking to acquire another company, it should consider several economic factors:

1. Profitability: The target company should have a strong track record of profitability. This can be assessed by looking at metrics such as net income, return on assets (ROA), and return on equity (ROE).

2. Growth Potential: The target company should have strong growth prospects. This can be evaluated by looking at its historical growth rates, market size, and market share.

3. Synergies: The acquisition should create synergies, meaning the combined company can achieve greater efficiency or higher revenues than the two companies could separately. This could be due to complementary products, technologies, or geographic markets.

4. Valuation: The target company should be reasonably priced. This can be assessed by looking at valuation ratios such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-book (P/B).

5. Financial Health: The target company should have a strong balance sheet. This can be evaluated by looking at metrics such as debt-to-equity ratio, current ratio, and quick ratio.

6. Strategic Fit: The target company should align with the acquiring company's strategic objectives. This could be related to expanding into new markets, acquiring new technologies, or diversifying product offerings.

7. Risk Assessment: The acquiring company should assess the potential risks associated with the acquisition. This could include regulatory risks, integration risks, and market risks.

By considering these factors, a company can make an informed decision about whether acquiring a particular company will likely increase shareholder wealth.