A quick Google search shows that Twilio's market cap is currently $7.4 billion. Does this $2 billion "all-stock" transaction mean that they are giving away over a quarter of the company to pay for this acquisition? Or how else should I read this?
So yes they are creating new shares making every other share worth less but it isn't a direct transfer of existing shares. You'll notice companies get board approval for setting aside a number of theoretical shares they could create if they wanted to for things like this or secondary offerings, etc.
> 0.485 shares of Twilio Class A common stock per share of SendGrid common stock
Technically, issuing new shares dilutes every existing shareholders' ownership. But, if the market deems this to be an intelligent combination that was valued correctly, the market cap of the combined company should be ~$9.4B or (ideally) more. So the goal is for existing shareholders to hold, at worst, the same amount of value in dollar terms as before or, at best, hold more value as a result of the acquisition.