Home Guides Mergers & Acquisitions in the US Deal Structures Variations - Reverse Triangular Merger

Reverse Triangular Merger

A reverse triangular merger is essentially the same as a direct merger, except that the Acquisition Subsidiary is merged into the Target.  This structure has the same advantages and disadvantages as a direct merger.  It also has the additional advantage of being simpler to affect, because the Buyer is the sole shareholder of the Acquisition Subsidiary, making shareholder approval easier to obtain.  The choice of which company (the Acquisition Subsidiary or the Target) should be the Surviving Company can be dictated by brand recognition, tax considerations or any other commercial factor the parties deem important.

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