Reverse subsidiary merger

Reverse subsidiary merger

The process by which the acquirer merges its subsidiary into the target company. Thus both the acquirer and target companies remain in existence after the merger. Also called Reverse triangular merger.
References in periodicals archive ?
Jacobs Engineering Group Inc (NYSE:JEC) and CH2M HILL Companies Ltd declared together on Thursday as per a preliminary vote tally from the special meeting of CH2M stockholders held on Wednesday (13 December 2017), CH2M's stockholders approved the proposal of its acquisition by Jacobs under a reverse subsidiary merger. As per the preliminary results, about 95.57% of CH2M's outstanding shares of common stock and preferred stock (on an as-converted basis), voted in favour of the merger.
Merger Sub merged into Distributing in a reverse subsidiary merger in which Distributing became a wholly owned subsidiary of Newco (the merger).
1.1502-75(d)(2)(ii) or (3), the IRS ruled that the formation of Merger Sub followed by the reverse subsidiary merger qualified as a Sec.
Reverse Subsidiary Mergers (section 368(a)(2)(E)) In an A reorganization under section 368(a)(2)(E), often referred to as a "reverse subsidiary merger," a controlled corporation is merged into the target corporation.
Following an increase in the offer price, Square D agreed to be acquired in a reverse subsidiary merger. After the transaction Square D paid the fees due to the foreign banks.
2008-25 to clarify the application of the step-transaction doctrine to situations in which an acquiring corporation (P) acquires a target corporation (T) by means of a reverse subsidiary merger followed immediately by a liquidation of T.
In the ruling, a publicly held corporation acquired a closely held target company through a reverse subsidiary merger. The parent corporation (P) created a subsidiary, which it merged with and into the target company (T).
However, in a reverse subsidiary merger involving a transitory subsidiary formed solely to perform the merger, the application of step-transaction principles casts the merger as the direct transfer of target stock, disregarding the subsidiary's existence as transitory; see, e.g., Rev.
368(a)(1)(A) if, as part of an integrated plan, (1) an acquiring corporation acquires all of the target's stock through a reverse subsidiary merger in which the target shareholders receive consideration consisting of 70% stock and 30% cash (this transaction, considered by itself, would be a taxable transaction); and (2) the target then merges into the acquirer.
Multi-step reorganizations such as a reverse subsidiary merger are often one step in a Sec.
2001-26 (22) presented two situations in which a portion of a target's stock was acquired in a tender offer; the remainder was acquired in a reverse subsidiary merger (using a mix of stock and cash).
Although most taxpayers and their advisers are aware of these tax consequences, that knowledge may be tested when the transaction being planned is a so-called "squeeze-out" or reverse subsidiary merger. The term reverse is important, because it indicates that the target corporation, and not the new company formed to effectuate the squeeze-out, will be the survivor.