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El-Aref Int’l Law Office successfully structured a triangular merger for its Client

November 2010

El-Aref Int’l Law Office successfully structured a triangular merger for its Client. This is the first triangular Merger in Lebanon and is a significant mandate for the firm. It also further demonstrates the firm's existing regional Mergers, Acquisitions capability, and growing expertise. 

El-Aref Intl Law Office successfully advised and provided structuring for a triangular merger for its client, in this triangular merger, the acquiring corporation would acquire control of the target corporation, forms a new subsidiary into which the target corporation is merged.  The stockholders of the acquiring corporation do not have the right to vote on the merger, only Board of Directors are entitled to vote.   

The outstanding shares of stock of the target are converted into shares of stock of the subsidiary all of which would be owned by the acquiring corporation.  The shares of stock of the subsidiary are converted into securities of the acquiring corporation, Merge Operating into Holdings (subsidiary), all other shares become shares of holdings (conversion). Pursuant to this Merger Agreement, a direct wholly owned subsidiary of Holdings, will merge with and into the Parent Borrower, the Merger Consideration being paid, and the Parent Borrower surviving as a wholly-owned subsidiary of Holdings. The advantage of this triangular merger in comparison to the traditional structure is that it can use any consideration specifically nonvoting stock desired without losing the tax advantage, and the surviving corporation obtains 100 % control of acquired corporation, there is no problem with minority interest.

 

This is the first triangular Merger in Lebanon and is a significant mandate for the firm. It also further demonstrates the firm's existing regional   Mergers, Acquisitions capability, and growing expertise.


 

For more information please visit www.elareflaw.com


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