De Facto Merger | Practical Law

De Facto Merger | Practical Law

De Facto Merger

De Facto Merger

Practical Law Glossary Item 3-382-3381 (Approx. 2 pages)

Glossary

De Facto Merger

A de facto merger occurs when a transaction (which is not structured as a merger) is in substance a merger of the seller and buyer. The de facto merger doctrine is meant to detect these transactions (usually an asset sale) to prevent companies from avoiding the assumption of seller's liabilities while enjoying all the benefits of a merger. For more information on different acquisition structures, see Practice Note, Private Acquisition Structures.