What is Amalgamation? Amalgamation is the process of combining two or more companies into a single entity. This can be done through a merger, acquisition, or consolidation. There are several benefits and drawbacks to this business strategy that you should be aware of before making a decision. Now, let’s look at a few examples of … Read more
Merger arbitrage is an investing strategy that seeks to profit from the difference between the market price of a target company and the price offered by the acquiring company. The strategy is often employed when a company is the subject of a takeover bid. The market price of the target company will usually rise when … Read more
An acquisition premium is the price paid by a buyer for a target company that is above the target’s current market value. The premium is typically paid in the form of cash or new shares in the buyer company. An acquisition premium may be paid for a number of reasons, including the desire to acquire … Read more
The safe harbor provisions of the merger statutes are designed to encourage voluntary compliance with the statutes by providing a “safe harbor” from liability for certain types of conduct. The safe harbor provisions do not preempt the application of the antitrust laws to conduct that falls outside the safe harbor. The safe harbor for merger … Read more
Negative goodwill is the amount by which the fair value of a company’s net assets exceeds the purchase price of the company. In other words, it is the amount by which the buyer of a company believes they have overpaid for the company. Negative goodwill can arise for a number of reasons, but is typically … Read more
In a reverse takeover (RTO), a private company acquires a public company in order to become public without going through an initial public offering (IPO). The process is often quicker and less expensive than an IPO, and it can be used by companies that would not be able to go public through an IPO due … Read more
A sweetheart deal is a business agreement in which one party receives preferential treatment at the expense of the other party. Sweetheart deals are often used in mergers and acquisitions, where the buyer may offer the seller a below-market price for the company’s assets in order to secure the deal. Sweetheart deals can also be … Read more
A Face-Amount Certificate Company is a life insurance company that issues policies in which the death benefit is equal to the face value of the policy. This type of policy is also known as a “straight life” policy. What is Section 17 of Investment Company Act? Under section 17 of the Investment Company Act, a … Read more
Affiliated companies are companies that are owned or controlled by the same parent company. They are often referred to as “sister companies.” Affiliated companies matter because they can be a source of growth for a parent company. By acquiring or investing in affiliated companies, a parent company can expand its reach and capabilities. Additionally, affiliated … Read more
A staggered board is a type of board of directors in which only a portion of the directors are up for election at any given time. This type of board is often used in order to make it more difficult for a hostile takeover to occur. Does Twitter have staggered board? As of February 2021, … Read more
