Required reading

1. EU: Cross Border Merger Directive, art. 2(2)

2. D: UmwG, § 2

3. UK: CA 2006, sec. 904

4. US: DGCL, §§ 251(a), (d), 103(d)

Tools and structures for corporate acquisitions

Transaction structures and protective tools

The essential characteristics of all stock corporations in each of our jurisdictions – a separate legal person owned by shareholders and managed by a central management – lead to like structures for transferring all or part of a company to a new owner. Because the legal person itself owns the corporate assets, and is in turn controlled by votes attaching to its shares, one can gain control of its assets by (a) directly purchasing those assets or (b) purchasing enough stock to control their owner, the company. A third way is also made possible by the laws of each of our three jurisdictions: have one entity “merge” (disappear, be absorbed) into the other or have both entities “merge” into a third entity, in each case by operation of law through a filing with the state, not unlike the way a new corporation is established. This is why we speak of “mergers” and “acquisitions” in the same context – because they are different roads to transferring assets to new control.