de facto merger
- It refers to a combination of companies that looks very much like a merger, in which one company issues shares to the company it's absorbing rather than buying its assets with money. The shareholders, directors, and employees from both companies continue to participate and the acquiring company assumes the liabilities of the company it's taking over
- In a de facto merger, the absorbing company usually takes over all liabilities and obligations of the absorbed entity.
- Despite not being a traditional merger, the company took over another in a de facto merger by issuing shares to the other corporation.
- The stockholders, directors, and employees of the absorbed company continue to hold their positions in the acquiring corporation after a de facto merger.