Asset Acquisition: Acquiring purchases all or substantially all assets of Target Acquiring corp. shareholder A shareholder B shareholder C shareholder D Board of Direct ors Board and shareholder approval of Target Board (and maybe shareholder) approval of Acquiring assets of Target sold for $$$ Target corp. Board of Direct ors $$$ asse ts Lende r $$ $
Asset Acquisition: Acquiring purchases all or substantially all assets of Target Acquiring corp. shareholder A shareholder A shareholder B shareholder.
Dec 23, 2015
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Asset Acquisition: Acquiring purchases all or substantially all assets of Target
Acquiring corp.
Acquiring corp.
shareholderA
shareholderA
shareholderB
shareholderB
shareholderC
shareholderC
shareholderD
shareholderD
Board of Directors
Board and shareholder approval of Target Board (and maybe shareholder) approval of Acquiring
assets of Target sold for $$$
Target corp.
Target corp.
Board of Directors
$$$
assets
Lender
$$$
Asset Acquisition: Acquiring purchases all or substantially all assets of Target
Acquiring corp.
Acquiring corp.
shareholderA
shareholderA
shareholderB
shareholderB
shareholderC
shareholderC
shareholderD
shareholderD
Board of Directors
Alternate: use Newco subsidiary to acquire assets of Target
Target corp.
Target corp.
Board of Directors
$$$
assets
Newco
Newco
Stock Purchase: Target becomes subsidiary of Acquiring
Acquiring corp.
Acquiring corp.
shareholderA
shareholderA
shareholderB
shareholderB
shareholderC
shareholderC
shareholderD
shareholderD
Board of Directors
Step #1: Acquiring buys stock of Target from shareholders
Target corp.
Target corp.
Board of Directors
$$$
stock
Stock Purchase: Target becomes Subsidiary of Acquiring
Acquiring corp.
Acquiring corp.
shareholderA
shareholderA
shareholderB
shareholderB
former Tshareholder
C$$$
former Tshareholder
C$$$
former Tshareholder
D$$$
former Tshareholder
D$$$
Step #2: Target becomes subsidiary of Acquiring
Board of Directors
Target
Target
Share Exchange: Acquiring buys Target with its stock
Acquiring corp.
Acquiring corp.
shareholderA
shareholderA
shareholderB
shareholderB
shareholderC
shareholderC
shareholderD
shareholderD
Board of Directors
Step #1: Board and shareholder approval of Target
Board (and maybe shareholder) approval of Acquiring
Target corp.
Target corp.
Board of Directors
Share Exchange: Acquiring buys Target with its stock
Acquiring corp.
Acquiring corp.
shareholderA
shareholderA
shareholderB
shareholderB
shareholderC
shareholderC
shareholderD
shareholderD
shares of Acquiring
Step #2: Shareholders of Target exchange their shares of Target for shares of Acquiring
Acquiring owns Target shares
Target corp.
Target corp.
Board of Directors shares of
Target
Board of Directors
Stock Exchange: Acquiring buys Target with its stock
Acquiring corp.
Acquiring corp.
shareholderA
shareholderA
shareholderB
shareholderB
shareholderC
shareholderC
shareholderD
shareholderD
Step #3: former shareholders of Target now own shares of Acquiring
Target becomes subsidiary of Acquiring
Board of Directors
Target corp.
Target corp.
Board
Corporate Merger: Target into Acquiring
Acquiring corp.
Acquiring corp.
shareholderA
shareholderA
shareholderB
shareholderB
shareholderC
shareholderC
shareholderD
shareholderD
Board of Directors
Step #1: Board and shareholder approval of Target
Board (and maybe shareholder) approval of Acquiring
Target corp.
Target corp.
Board of Directors
Corporate Merger: Target into Acquiring
Acquiring corp.
Acquiring corp.
shareholderA
shareholderA
shareholderB
shareholderB
shareholderC
shareholderC
shareholderD
shareholderD
$$$
Step #2: Target merges into Acquiring under Corp. statute
Shareholders of Target get cash for shares of Target
Target corp.
Target corp.
Board of Directors
assets & debts
Corporate Merger: Target into Acquiring
Acquiring corp.:
owns assets & debtsof Target
Acquiring corp.:
owns assets & debtsof Target
shareholderA
shareholderA
shareholderB
shareholderB
former Tshareholder
C$$$
former Tshareholder
C$$$
former Tshareholder
D$$$
former Tshareholder
D$$$
Step #3: shareholders of Target cashed out
Acquiring takes assets & debts (and tax attributes) of Target
Board of Directors
Corporate Merger: Target into Acquisition Subsidiary
Acquiring corp.
Acquiring corp.
shareholderA
shareholderA
shareholderB
shareholderB
shareholderC
shareholderC
shareholderD
shareholderD
$$$
Alternate Step #2: Target merges into Newco acquisition sub
Shareholders of Target get cash for shares of Target
Target corp.
Target corp.
Board of Directors
assets & debts
Newco: acquisition sub.
Newco: acquisition sub.
Corporate Merger: Target into Acquisition Subsidiary
Acquiring corp.
Acquiring corp.
shareholderA
shareholderA
shareholderB
shareholderB
former Tshareholder
C$$$
former Tshareholder
C$$$
former Tshareholder
D$$$
former Tshareholder
D$$$
Alternate Step #3: Newco acquisition Sub owns assets of Target
old shareholders of Target cashed out
Board of Directors
Newco: acquisition sub.
owns assets & debts of Target
Newco: acquisition sub.
owns assets & debts of Target
Statutory Merger (“short-form” merger)
Parent
Parent
shareholdershareholder shareholdershareholder
Step #1: Parent own 90% or more of Subsidiary
Board of parent approves merger of Sub into Parent approval of Board & Shareholders of Sub not required
minority shareholders cashed out have (dissenters’) appraisal rights
Board of Directors
subsidiarysubsidiary Board of Directors
90% or >
minorityshareholdersminority
shareholders
10% or less
$$$
Statutory Merger (“short-form” merger)
Parent
Parent
shareholdershareholder shareholdershareholder
Step #2: Sub merged into Parent
Parent acquires assets and debts of former Sub
Board of Directors
subsidiarysubsidiary
sub merged into parent
formershareholders
$$$
formershareholders
$$$
Statutory Merger (“short-form” merger)
Parent:
with assets & debtsof former Sub
Parent:
with assets & debtsof former Sub
shareholdershareholder shareholdershareholder
Step #3: Parent owns assets and debts of former Sub
Board of Directors
Consolidation
shareholdersshareholders shareholdersshareholders
Board of Directors
Corporation 2:business B
Corporation 2:business B
Corporation 1business A
Board of Directors
Consolidation
shareholdersshareholders shareholdersshareholders
Board of Directors
Corporation 2:business B
Corporation 2:business B
Corporation 1business A
Board of Directors
New Corporation
New Corporation
Consolidation
shareholdersshareholders shareholdersshareholders
Board of Directors
Corporation 2:businessB
Corporation 2:businessB
Corporation 1:business A
Board of Directors
New Corporation
New Corporation
merger merger
Consolidation
shareholdersshareholders shareholdersshareholders
Board of Directors
New Corporation:business Abusiness B
New Corporation:business Abusiness B
Divisive Reorganization: Spin-Off
Corporation:Business XBusiness Y
Corporation:Business XBusiness Y
shareholderA
shareholderA
shareholderB
shareholderB
Board of Directors
Divisive Reorganization: Spin-Off
Corporation
Corporation
shareholderA
shareholderA
shareholderB
shareholderB
Step #1: drop businesses X and Y into new subsidiaries
Newco 2:Business Y
Newco 2:Business Y
Newco 1:Business X
Newco 1:Business X
Divisive Reorganization: Spin-Off
Corporation
Corporation
shareholderA
shareholderA
shareholderB
shareholderB
Step #2: distribute shares of Newco to
shareholders of Corporation
Newco 1:Business X
Newco 1:Business X
Newco 2:Business Y
Newco 2:Business Y
distribute shares
Divisive Reorganization: Spin-Off
Newco 1:Business X
Newco 1:Business X
shareholderA
shareholderA
shareholderB
shareholderB
Step #3: A and B own shares of both Newco 1 and Newco 2
Newco 2:Business Y
Newco 2:Business Y
Foreign Corporation with U.S. Subsidiary
Foreign Corporation
100%
Foreign Corporation
100%
shareholdershareholder shareholdershareholder
parent is foreign corporation subsidiary operates business in U.S.
U.S. subsidiary
U.S. subsidiary
shareholdershareholdershareholdershareholder
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