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In a reverse triangular merger, the acquirer creates a subsidiary that merges into the selling entity and then liquidates, leaving the selling entity as the surviving entity, and a subsidiary of the acquirer. The buyer’s stock is then issued to the seller’s shareholders. Because the reverse triangular merger retains the seller entity and its business contracts, the reverse triangular merger is used more often than the triangular merger.

Benefits of a Reverse Triangular Merger

A reverse triangular merger is attractive when the seller’s continued existence is needed for reasons other than tax benefits, such as rights relating to franchising, leasing or contracts, or specific licenses that may be held and owned solely by the seller.



Read more: Reverse Triangular Merger Definition | Investopedia http://www.investopedia.com/terms/r/rtm.asp#ixzz4XNnPFqYY