Series 79 practice questionmediumMerger Types
Which type of merger is most commonly used when the acquirer wants to preserve the target’s contracts that contain anti-assignment clauses?
- ADirect statutory merger
- BReverse triangular merger✓ Correct answer
- CForward triangular merger
- DAsset purchase
Explanation
Why B — Reverse triangular merger
A reverse triangular merger is commonly used when preserving target contracts is important because the target survives as a subsidiary of the buyer. Since the target legal entity remains in place, contracts with anti-assignment clauses are less likely to require consent than in an asset purchase or many forward-merger structures.
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