Reverse Merger: Is The Backdoor Still Open?

Mergers open doors for rapid inorganic growth, which is aimed at corporations across the world. We have seen what mergers are, their stages, types, and inbound and outbound mergers. July 2021 marked thirty years of economic reforms post which the companies in India were exposed to international competition. The late 1990s witnessed a trend of mergers in the Indian market. There are various kinds of mergers and motives behind each.

A reverse merger is also known as a reverse IPO (Initial Public Offering), where a private company acquires a publicly listed company.

The public company is a mere shell, and most shareholders are from private companies. We know that there are motives behind any merger, acquisition, or amalgamation, and such motives can be value creation which consists of revenue synergies and cost synergies. Other purposes include diversification, asset acquisition, and tax purposes. IPO can, at many times, be risky, time-consuming as well as