HIST 3305 Lecture Notes - Lecture 11: Target Corporation
Document Summary
Acquisition mechanics: three basic state-law structures (30-57, statutory merger: stock for stock, two corporations start as separate legal entities with separate owners. One corporation merges into the other, leaving the corporation being merged into as the sole survivor; or the two corporations can merge into a new corporation formed in the transaction: del. Gen. corp. l. 253 (short-form merger) Permits the merger of the subsidiary into the parent (an upstream merger) solely on a resolution of the parent"s board of directors when the parent corporation holds over 90 percent of each class of the subsidiary"s voting stock. There is no change in the constitutional documents of either corporation, nor is there any change in the number of shares outstanding in either corporation. Once the asset sale is complete, the target corporation usually uses its cash to settle any outstanding liabilities and pay off its shareholders: del.
