Reverse and Forward Triangular Mergers (including “Double Dummy” Structures): Corporate Law Considerations, Tax Implications

Merger transactions are often structured as triangular mergers, which involves the buyer forming a wholly owned subsidiary that is merged with or into the target company. Triangular mergers may be forward or reverse. Tax, legal, and other factors drive the decision of which structure to pursue.

Reverse triangular mergers may be an option if the buyer's objective is to protect the value of the contractual rights and licenses of the target company or to avoid a transfer of assets, employees, and corporate and tax attributes. Forward triangular mergers may be beneficial where the objective is issuance of stock to the target company shareholders in a tax efficient manner.

Listen as our authoritative panel discusses key considerations for structuring an M&A deal as a reverse or forward triangular merger, potential pitfalls concerning anti-assignment clauses, tax considerations, and drafting approaches.

I. Corporate law requirements

II. Anti-assignment clauses

III. Tax consequences and issues

IV. Double dummy holding company transactions

The panel will review these and other key issues:

• What are the advantages and disadvantages of structuring an acquisition as a forward or reverse triangular merger?
• What risks are associated with triangular mergers, and what should counsel consider when structuring the acquisition?
• What are the tax costs and risks in a triangular merger?
• What is the impact of a triangular merger on contracts, licenses, and corporate attributes?