Conglomerate Merger
What is a Conglomerate Merger? A Conglomerate Merger is a union between companies that operate in different industries and are involved in distinct, unrelated business activities. Conglomerate mergers are divided into pure conglomerate mergers and mixed conglomerate mergers. The first type – the pure merger – is comprised of two companies that operate in separate...
Drag Along Rights
What are Drag Along Rights? Drag Along Rights (also referred to as “drags” or drag-along provisions) are rights that give the majority owners the right to force minority owners to join in the sale of a company. The rights give the majority owners the ability to sell the entire company based on the terms and...
Definitive Purchase Agreement
What is a Definitive Purchase Agreement? A Definitive Purchase Agreement (DPA) is a legal document that records the terms and conditions between two companies that enter into an agreement for a merger, acquisition, divestiture, joint venture, or some form of strategic alliance. It is a mutually binding contract between the buyer and seller and includes...
Reverse Morris Trust
What is Reverse Morris Trust? The Reverse Morris Trust is a form of tax avoidance employed by companies. This tactic enables the company to sell off unwanted assets without incurring tax obligations on gains arising from the sale of these assets. The Reverse Morris Trust technique works in the following manner: a parent company spins...
Statutory Merger
Overview of a Statutory Merger In a statutory merger between two companies (where company A merges with company B), one of the two companies will continue to survive after the transaction has completed. This is a common form of combination in the mergers and acquisitions process. For example, Company B may lose its independent identity...
