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Mergers are transactions involving the combination of generally two or more companies into a single entity. The need for shareholder approval of a merger is governed by state law. Typically, a merger must be approved by the holders of a majority of the outstanding shares of the target company.
The vote for a merger is typically a vote requiring the approval of either a majority or two-thirds of all shares issued and outstanding for the company.
Once the meeting is held, if a majority of the shareholders vote in favor of the merger agreement, the merger is approved. Keep in mind that Section 251 contains a number of exceptions for when a vote of the shareholders is not required.
Because the FTC and the Department of Justice share jurisdiction over merger review, transactions requiring further review are assigned to one agency on a case-by-case basis depending on which agency has more expertise with the industry involved.
The merger process varies from state-to-state. However, there are some rules that all states have in common. First, you can expect every state to require board approval from the target firm (the one that will not survive for a merger).
Market estimates place a merger's timeframe for completion between six months to several years. In some instances, it may take only a few months to finalize the entire merger process. However, if there is a broad range of variables and approval hurdles, the merger process can be elongated to a much longer period.
Merger transactions typically require approval of the boards of directors of the constituent companies and a vote of the shareholders of the constituent companies.
MERGER & CONSOLIDATION: PROCEDURE Short-Form Merger: A merger between a parent and a subsidiary (at least 90% owned by the parent) which can be accomplished without shareholder approval.
{¶ 15} When contracts pass to the surviving company following merger, the surviving company obtains the same bargain agreed to by the preceding company, nothing more. Our decision today honors the noncompete agreement obtained by the employees' original employers.