What is considered de facto merger?

A de facto merger occurs when a transaction (which is not structured as a merger) is in substance a merger of the seller and buyer. For more information on different acquisition structures, see Practice Note, Private Acquisition Structures.

What are successor liabilities?

A state law doctrine that allows a creditor to seek recovery from the purchaser of assets for liabilities that were not assumed as part of an acquisition. The buyer expressly or impliedly assumes the liabilities. The transaction is deemed a de facto merger under state law.

What is the merger rule?

In criminal law, if a defendant commits a single act that simultaneously fulfills the definition of two separate offenses, merger will occur. This means that the lesser of the two offences will drop out, and the defendant will only be charged with the greater offense. See Merger (for other uses of the term).

What is a reverse triangular merger?

A reverse triangular merger is the formation of a new company that occurs when an acquiring company creates a subsidiary, the subsidiary purchases the target company, and the subsidiary is then absorbed by the target company.

What is a cash merger?

Meaning of cash merger in English an occasion when two or more companies join and where the buying company buys the other company’s shares with cash, rather than exchanging them for its own shares: The company proposed a cash merger valued at $170 million with a manufacturer of industrial machine parts.

What is de jure merger?

A de facto merger is a transaction between two companies that is not structured as a merger but in effect has the same results. Generally, it arises during the acquisition of one firms assets and/or voting stock by another company.

What happens to liabilities in an asset purchase?

What Happens With Liabilities in an Asset Purchase. In an asset purchase or acquisition, the buyer only buys the specific assets and liabilities listed in the purchase agreement. So, it’s possible for there to be a liability transfer from the seller to the buyer.

What excluded liabilities?

Excluded Liabilities means any Liabilities of Sellers, whether existing on the Closing Date or arising thereafter as a result of any act, omission or circumstances taking place prior to the Closing, other than the Assumed Liabilities.

What is merger by deed?

The merger doctrine is a common law doctrine, under which all prior agreements between a buyer and a seller merge into the delivery of the deed upon acceptance of the deed by the buyer.

What is reverse merger example?

One example of a reverse merger was when ICICI merged with its arm ICICI Bank in 2002. But when Godrej Soaps — profitable and with a turnover of ₹437 crore — did a reverse merger with loss-making Gujarat Godrej Innovative Chemicals (turnover of ₹60 crore), the resulting firm was named Godrej Soaps.

Why do a triangular merger?

In a triangular merger, the acquirer creates a wholly-owned subsidiary, which in turn merges with the selling entity. The selling entity then liquidates. Depending on the structure of the deal, a triangular merger can reduce the effort required to obtain shareholder approval of an acquisition.