Special Considerations under Form S-4
All mergers must be filed with the SEC on Form S-4. For instance, here are five common forms of mergers:
1. Conglomerate Mergers: This involve two unconnected firms combining to extend their present markets.
2. Congeneric Mergers: These mergers include firms that operate in the same market. Because the firms may employ the same raw materials, technology, and R&D processes, the merger results in efficiencies or economies of scale.
3. Market Extension Mergers: The merging firms may provide identical items in other markets. The objective for all stakeholders is to enter new markets.
4. Horizontal Mergers: The merging parties are rivals from the same industry. The combination aims to increase market share.
5. Vertical Mergers: The supply chain is the driving force behind vertical mergers. Usually, one business supplies the other, and the combined business lowers the cost of the finished good.
Investors anticipate that a hostile merger or takeover will result in higher stock prices. Therefore, corporations looking to take over another company hostilely must submit Form S-4 to give public notice in the interest of disclosure.
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