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To: Brad who wrote (747)	11/25/1997 7:09:00 PM
From: BJ Cooke	Respond to of 6654

Greetings, Even when I was awake in corporations class, mergers went over my head...but I have my book out. Do you know for certain that it will be a triangular or reverse merger? In the book, "Corporations", (Little, Brown and Co, 1994) by Palmiter and Solomon, it says: Triangular Merger (and Compulsory Stock Exchange) "Absorption by merger may not always be desired. In many instances, the acquiring corporation will want to keep the acquired firm's business incorporated separately, held as a wholly owned subsidiary. This may be necessary to comply with antidiversification requirements in regulated industries,such as banking or insurance. It may also be desirable to insulate the parent from the subsidiary's liabilities or to keep the acquired business separate if the parent plans to sell it in the future. Neither a statutory merger nor a sale of assets accomplishes this result. Nonetheless, the statutory merger technique can fill the bill with a triangular merger. Consider the following series of transactions: A. Alpha sets up a new wholly owned subsidiary--Merger Sub. Alpha capitalizes Merger Sub with its shares or other assets (such as cash). In return, Merger Sub issues all of its shares to Alpha. B. Merger Sub enters into a plan of merger with Sigma under which Merger Sub will be the surviving corporation. C. After the merger of Sigma into Merger Sub, Sigma's shareholder will receive as consideration either Alpha stock or other assets that Merger Sub received when Alpha capitalized it. D. After the merger, Alpha continues as the sole shareholder of the surviving Merger Sub, which might adopt a new, more descriptive name like Alpha-Sigma, Inc. as part of the plan of merger." Who's on first? Then they draw a picture, which I don't really understand either, so if this answers anyone's questions, more power to you, or if you can explain it in lay terms (which I wish I could) I'd love to hear it.:-} Barbara