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Statutory Merger

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Statutory merger
A merger in which one corporation remains as a legal entity, instead of a new legal entity being formed.

Statutory Merger
A merger between two or more companies in which one company continues to legally exist, while all others cease to exist. That is, if Company A and Company B merge, Company A will continue to exist under its own name, while Company B will begin to operate under the name, "Company A." A statutory merger is essentially the same as an acquisition, though an acquisition carries a slight connotation of a hostile takeover, while a statutory merger does not. See also: Statutory consolidation.


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The new BVI Business Companies Act has given the jurisdiction a favorable statutory merger regime.
However, if the target remains in existence as a disregarded entity, a statutory merger has not occurred, because it "continues to exist as a juridical entity," albeit as a disregarded one; see Regs.
The traditional route, known as a statutory merger freezeout, mandates an SC with veto power over the deal, followed by stringent "entire fairness" review by the courts.
 
 
 
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