Reverse Triangular Mergers

A reverse triangular merger is a type of merger in which the target company (the company being acquired) becomes the surviving company and the acquiring company (the company doing the acquiring) becomes a subsidiary of the target company. This is in contrast to a regular merger, in which the acquiring company becomes the surviving company and the target company becomes a subsidiary of the acquiring company.

There are a few reasons why a company might choose to do a reverse triangular merger. One reason is that it can be a way to avoid the costs and hassle of a regular merger. Another reason is that it can be a way to preserve the target company's tax status. And finally, a reverse triangular merger can be a way to avoid the need for shareholder approval of the merger.

The process of a reverse triangular merger is as follows:

1. The target company creates a new subsidiary company.
2. The acquiring company merges with the new subsidiary company.
3. The target company becomes the surviving company and the acquiring company becomes a subsidiary of the target company.

There are a few things to keep in mind when considering a reverse triangular merger. First, it is important to make sure that the target company is in a good financial position. Second, it is important to make sure that the acquiring company is willing to take on the liabilities of the target company. And finally, it is important to make sure that the shareholders of the target company are aware of the implications of the merger.

Overall, a reverse triangular merger can be a good way for a company to acquire another company without having to go through the hassle and expense of a regular merger. However, it is important to weigh the pros and cons carefully before making a decision.