Merger refers to the situation where one of the constituent corporations remains in being and absorbs into itself the other constituent corporation. It refers to the case where no new corporation is created, but where one of the constituent corporations ceases to exist, being absorbed by the remaining corporation.
Generally, statutes authorizing the combination of corporations prescribe the steps by which consolidation or merger may be effected. The general procedure is that the constituent corporations make a contract setting forth the terms of the merger or consolidation, which is subsequently ratified by the requisite number of stockholders of each corporation.
Missouri Checklist of Matters that Should be Considered in Drafting a Merger Agreement: A Comprehensive Examination When preparing a merger agreement in Missouri, it is crucial to address a wide range of essential matters to ensure a smooth and legally sound transaction. The following checklist highlights key considerations that should be taken into account during the drafting process: 1. Parties involved: Clearly identify the merging entities, including their legal names, addresses, and details regarding their corporate structures and ownership. 2. Background and purpose: Provide a comprehensive overview of the reasons and strategic goals driving the merger, emphasizing the anticipated benefits and synergies for all parties involved. 3. Transaction structure: Determine the type of merger being pursued, such as a statutory merger, merger through acquisition, or merger of equals, and outline the proposed steps and timeline for the transaction. 4. Purchase price and consideration: Specify the amount of consideration to be paid for the merger, whether in cash, stock, or a combination thereof. Include details related to price adjustments, earn-outs, and potential contingent payments. 5. Representations and warranties: Enumerate the representations and warranties that the parties will make to each other regarding their respective businesses, assets, liabilities, financial statements, legal compliance, intellectual property rights, and material contracts. 6. Due diligence: Highlight the due diligence process undertaken by both parties, ensuring that all material information has been thoroughly reviewed. Define any exceptions to the representations and warranties based on the outcome of the due diligence investigations. 7. Conditions precedent: Outline the conditions that must be fulfilled and satisfied before the merger can proceed, such as the receipt of required regulatory approvals, shareholder approvals, and third-party consents, as well as the absence of any material adverse effects on the businesses. 8. Termination rights: Define the circumstances under which either party may terminate the merger agreement, including the payment of a termination fee, and outline the rights and remedies available upon such termination. 9. Governing law and jurisdiction: Determine the applicable law governing the merger agreement and identify the jurisdiction in which any disputes arising from the agreement will be resolved. 10. Confidentiality: Establish strict confidentiality provisions to safeguard sensitive business information exchanged during the negotiation and due diligence phases. 11. Employee matters: Address matters related to the merging employees, including the treatment of existing contracts, compensation, benefits, pensions, and potential redundancies or layoffs. 12. Post-closing covenants: Detail any obligations to be assumed by the parties after the merger is completed, such as integration plans, regulatory filings, or necessary corporate actions. Additional types of Missouri Checklist of Matters that Should be Considered in Drafting a Merger Agreement may include: — Specific industry regulations: Highlight any industry-specific laws or regulations that may impact the merger agreement, ensuring compliance with relevant state and federal guidelines. — Tax considerations: Incorporate tax-related provisions to address any transfer tax, sales tax, or other tax obligations arising from the merger. — Environmental liabilities: Carefully evaluate and allocate any potential environmental liabilities associated with the merging entities' activities. By meticulously addressing these matters in the merger agreement, parties to a Missouri merger can minimize risks, protect their interests, and promote a successful integration. Working closely with legal professionals experienced in Missouri merger transactions is vital to ensure compliance with applicable laws and regulations.
