Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Tutoring
  • Home
  • Law, Transactions, & Risk Management
  • Business Transactions, Antitrust, & Securities Law

De Facto Merger - Explained

What is a De Facto Merger?

Written by Jason Gordon

Updated at April 15th, 2022

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

Table of Contents

What is a De Facto Merger?How does a De Facto Merger Work?Academic Research on De Facto Merger

What is a De Facto Merger?

A de facto merger is a transaction between two companies that is not structured as a merger but in effect has the same results. Generally, it arises during the acquisition of one firms assets and/or voting stock by another company.

Back To: BUSINESS  LAW

How does a De Facto Merger Work?

The de facto merger doctrine empowers the courts to determine whether the statutory merger law applies to the situation. Generally, when any such transactions take place between two companies regarding acquisition of asset or voting stocks, the buyer company may enjoy all the benefits of a merger, but it may avoid the liabilities of the seller as a merger is not declared. The de facto doctrine prevents this and obligates the buyer company to assume the sellers liabilities. The doctrine was first adopted in Pennsylvania, since then courts in other states have modified it on their own terms or have rejected it altogether.

Back to: Business Transactions


de facto merger

Was this article helpful?

Yes
No

Related Articles

  • Hart Scott Rodino Act - Explained
  • Clayton Act - Antitrust Law
  • Due Diligence - Explained
  • Funding from Equity Investors - Explained



©2011-2023. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand