This lesson is a brief introduction to the four major types of corporate acquisitions: mergers, compulsory share exchanges, sales of assets, and tender offers. It includes descriptions of different types of mergers: stock-for-stock mergers, cashout mergers, and triangular mergers. It also briefly explains multi-step transactions, such as tender offers followed by cashout mergers or sales of assets followed by dissolution of the selling corporation.
The purpose of this lesson is to explain how the different types of transactions work so that students can understand the essence of each type of combination. It is intended as a prelude to discussion of the law affecting business combinations and would therefore be most useful as a preliminary introduction to course material dealing with mergers and acquisitions, done before classroom discussion begins.
This lesson does not discuss the legal requirements for doing the transactions in any detail, nor does it discuss appraisal rights arising from business combinations. Separate CALI lessons on voting and appraisal rights in business combinations cover those topics. This lesson also does not deal with fiduciary duty concerns arising in business combinations. That topic is also the subject of separate CALI lessons.