Reverse Triangular Merger

Reverse Triangular Merger

In mergers and acquisitions, a situation in which a company is acquiring a publicly-traded target company and, in the process, a subsidiary of the acquiring company merges with the target company. When this occurs, the equity of the subsidiary is reflected in the target company's stock. The result makes the target company a wholly owned subsidiary, and shareholders in the target company instead receive shares in the acquiring company. Reverse triangular mergers occur when regulations or contracts require that certain assets not change hands.