Reverse Triangular Merger: Not to be confused with a "reverse merger" a reverse triangular merger refers to a transaction in which the acquiring company forms a subsidiary for the special purpose of merging with the target company. By virtue of the merger, the target becomes a subsidiary of the acquiror and shareholders of the target receive shares in the acquiring company.
This is a common structure for mergers, especially where it makes sense for the acquired company to be operated as a subsidiary of the acquiror rather than be merged with it. -------------------------------- This makes a lot of sense, we own a small public company... we know we are gonna merge with a large generic company. It makes more sense to merge with us and make us their subsidiary.. then just merge with us.
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