What is a reverse triangular fusion?

Reverse triangular fusion is a situation where a targeted company is merged with the subsidiary of the company Korporation, which acquires the target company. This approach, sometimes used as a means of compliance with regulatory criteria established by a government agency, combines shares of the target company with its own capital of a subsidiary. The final result is that the target company becomes a completely owned subsidiary of the Acquisition Company, which allows shareholders in the target company to accept shares issued by the acquiring companies.

with a reverse triangular fusion, a strategy usually requires that a subsidiary acquires a company acquiring in the process of merging with the newly acquired target company. As soon as the merger occurs, liquidation occurs. At this point, the acquirer reorganizes the liquidated company to a new entity that holds the assets of the original subsidiary and the target company acquired. This access also the settlement of all shares of shares issued by two previous SubYects and prepares a journey for shareholders to accept shares issued by the parent company new entities.

One of the advantages of a reverse triangular fusion is that this process can often help minimize the tax burden that would otherwise be created by the merger process. In many places around the world it is possible to reduce taxes owed by the fact that the target company allows you to efficiently purchase assets of a subsidiary and then buy control over at least 80% of the target company asset. Although somewhat more complicated than simply merging these two main companies into one new unit, the addition of a subsidiary into the process and involvement in the structured purchase and sale of the company's assets allows to legally use the prevailing tax laws. Since the AX darresses differ from one country to the other, the amount of savings created by this approach will also vary.

daThe advantage of reverse triangular fusion is that this process can also help maintain any contracts with customers and sellers that would otherwise become zero and invalid if there was a direct acquisition. Since the target company will survive as a completely owned subsidiary by this strategy, any contracts remain abolished as a result of the purchase, intact. Access to back triangular fusion is particularly useful if these contracts include agreements that offer volume discounts from sellers or lucrative and long -term obligations from long -term customers.