Asset Acquisition: Acquiring purchases all or substantially all assets of Target

Acquiring corp.

Acquiring corp.

shareholderA

shareholderA

shareholderB

shareholderB

shareholderC

shareholderC

shareholderD

shareholderD

Board of Directors

Board and shareholder approval of Target Board (and maybe shareholder) approval of Acquiring

assets of Target sold for $$$

Target corp.

Target corp.

Board of Directors

$$$

assets

Lender

$$$

Asset Acquisition: Acquiring purchases all or substantially all assets of Target

Acquiring corp.

Acquiring corp.

shareholderA

shareholderA

shareholderB

shareholderB

shareholderC

shareholderC

shareholderD

shareholderD

Board of Directors

Alternate: use Newco subsidiary to acquire assets of Target

Target corp.

Target corp.

Board of Directors

$$$

assets

Newco

Newco

Stock Purchase: Target becomes subsidiary of Acquiring

Acquiring corp.

Acquiring corp.

shareholderA

shareholderA

shareholderB

shareholderB

shareholderC

shareholderC

shareholderD

shareholderD

Board of Directors

Step #1: Acquiring buys stock of Target from shareholders

Target corp.

Target corp.

Board of Directors

$$$

stock

Stock Purchase: Target becomes Subsidiary of Acquiring

Acquiring corp.

Acquiring corp.

shareholderA

shareholderA

shareholderB

shareholderB

former Tshareholder

C$$$

former Tshareholder

C$$$

former Tshareholder

D$$$

former Tshareholder

D$$$

Step #2: Target becomes subsidiary of Acquiring

Board of Directors

Target

Target

Share Exchange: Acquiring buys Target with its stock

Acquiring corp.

Acquiring corp.

shareholderA

shareholderA

shareholderB

shareholderB

shareholderC

shareholderC

shareholderD

shareholderD

Board of Directors

Step #1: Board and shareholder approval of Target

Board (and maybe shareholder) approval of Acquiring

Target corp.

Target corp.

Board of Directors

Share Exchange: Acquiring buys Target with its stock

Acquiring corp.

Acquiring corp.

shareholderA

shareholderA

shareholderB

shareholderB

shareholderC

shareholderC

shareholderD

shareholderD

shares of Acquiring

Step #2: Shareholders of Target exchange their shares of Target for shares of Acquiring

Acquiring owns Target shares

Target corp.

Target corp.

Board of Directors shares of

Target

Board of Directors

Stock Exchange: Acquiring buys Target with its stock

Acquiring corp.

Acquiring corp.

shareholderA

shareholderA

shareholderB

shareholderB

shareholderC

shareholderC

shareholderD

shareholderD

Step #3: former shareholders of Target now own shares of Acquiring

Target becomes subsidiary of Acquiring

Board of Directors

Target corp.

Target corp.

Board

Corporate Merger: Target into Acquiring

Acquiring corp.

Acquiring corp.

shareholderA

shareholderA

shareholderB

shareholderB

shareholderC

shareholderC

shareholderD

shareholderD

Board of Directors

Step #1: Board and shareholder approval of Target

Board (and maybe shareholder) approval of Acquiring

Target corp.

Target corp.

Board of Directors

Corporate Merger: Target into Acquiring

Acquiring corp.

Acquiring corp.

shareholderA

shareholderA

shareholderB

shareholderB

shareholderC

shareholderC

shareholderD

shareholderD

$$$

Step #2: Target merges into Acquiring under Corp. statute

Shareholders of Target get cash for shares of Target

Target corp.

Target corp.

Board of Directors

assets & debts

Corporate Merger: Target into Acquiring

Acquiring corp.:

owns assets & debtsof Target

Acquiring corp.:

owns assets & debtsof Target

shareholderA

shareholderA

shareholderB

shareholderB

former Tshareholder

C$$$

former Tshareholder

C$$$

former Tshareholder

D$$$

former Tshareholder

D$$$

Step #3: shareholders of Target cashed out

Acquiring takes assets & debts (and tax attributes) of Target

Board of Directors

Corporate Merger: Target into Acquisition Subsidiary

Acquiring corp.

Acquiring corp.

shareholderA

shareholderA

shareholderB

shareholderB

shareholderC

shareholderC

shareholderD

shareholderD

$$$

Alternate Step #2: Target merges into Newco acquisition sub

Shareholders of Target get cash for shares of Target

Target corp.

Target corp.

Board of Directors

assets & debts

Newco: acquisition sub.

Newco: acquisition sub.

Corporate Merger: Target into Acquisition Subsidiary

Acquiring corp.

Acquiring corp.

shareholderA

shareholderA

shareholderB

shareholderB

former Tshareholder

C$$$

former Tshareholder

C$$$

former Tshareholder

D$$$

former Tshareholder

D$$$

Alternate Step #3: Newco acquisition Sub owns assets of Target

old shareholders of Target cashed out

Board of Directors

Newco: acquisition sub.

owns assets & debts of Target

Newco: acquisition sub.

owns assets & debts of Target

Statutory Merger (“short-form” merger)

Parent

Parent

shareholdershareholder shareholdershareholder

Step #1: Parent own 90% or more of Subsidiary

Board of parent approves merger of Sub into Parent approval of Board & Shareholders of Sub not required

minority shareholders cashed out have (dissenters’) appraisal rights

Board of Directors

subsidiarysubsidiary Board of Directors

90% or >

minorityshareholdersminority

shareholders

10% or less

$$$

Statutory Merger (“short-form” merger)

Parent

Parent

shareholdershareholder shareholdershareholder

Step #2: Sub merged into Parent

Parent acquires assets and debts of former Sub

Board of Directors

subsidiarysubsidiary

sub merged into parent

formershareholders

$$$

formershareholders

$$$

Statutory Merger (“short-form” merger)

Parent:

with assets & debtsof former Sub

Parent:

with assets & debtsof former Sub

shareholdershareholder shareholdershareholder

Step #3: Parent owns assets and debts of former Sub

Board of Directors

Consolidation

shareholdersshareholders shareholdersshareholders

Board of Directors

Corporation 2:business B

Corporation 2:business B

Corporation 1business A

Board of Directors

Consolidation

shareholdersshareholders shareholdersshareholders

Board of Directors

Corporation 2:business B

Corporation 2:business B

Corporation 1business A

Board of Directors

New Corporation

New Corporation

Consolidation

shareholdersshareholders shareholdersshareholders

Board of Directors

Corporation 2:businessB

Corporation 2:businessB

Corporation 1:business A

Board of Directors

New Corporation

New Corporation

merger merger

Consolidation

shareholdersshareholders shareholdersshareholders

Board of Directors

New Corporation:business Abusiness B

New Corporation:business Abusiness B

Divisive Reorganization: Spin-Off

Corporation:Business XBusiness Y

Corporation:Business XBusiness Y

shareholderA

shareholderA

shareholderB

shareholderB

Board of Directors

Divisive Reorganization: Spin-Off

Corporation

Corporation

shareholderA

shareholderA

shareholderB

shareholderB

Step #1: drop businesses X and Y into new subsidiaries

Newco 2:Business Y

Newco 2:Business Y

Newco 1:Business X

Newco 1:Business X

Divisive Reorganization: Spin-Off

Corporation

Corporation

shareholderA

shareholderA

shareholderB

shareholderB

Step #2: distribute shares of Newco to

shareholders of Corporation

Newco 1:Business X

Newco 1:Business X

Newco 2:Business Y

Newco 2:Business Y

distribute shares

Divisive Reorganization: Spin-Off

Newco 1:Business X

Newco 1:Business X

shareholderA

shareholderA

shareholderB

shareholderB

Step #3: A and B own shares of both Newco 1 and Newco 2

Newco 2:Business Y

Newco 2:Business Y

Foreign Corporation with U.S. Subsidiary

Foreign Corporation

100%

Foreign Corporation

100%

shareholdershareholder shareholdershareholder

parent is foreign corporation subsidiary operates business in U.S.

U.S. subsidiary

U.S. subsidiary

shareholdershareholdershareholdershareholder