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a merger of the parent holding companies;
a reverse triangular merger of a newly-formed merger subsidiary of the acquiror
with and into the target company where the target company survives as a
subsidiary of the acquiror;
a forward triangular merger where the target company is merged with and into a
newly-formed merger subsidiary of the acquiror where the merger subsidiary
survives; and
the formation of a new holding company into which both companies are
merged, either directly into the holding company or into separate merger
subsidiaries of the holding company.
Many variations on these basic themes are possible. A highly unusual structure
was used in 2004 when The Toronto-Dominion Bank acquired 51 percent of Banknorth
Group; Banknorth first reincorporated from Maine to Delaware via a merger with a newly-
formed Banknorth subsidiary and then a subsidiary of Toronto Dominion merged with
and into Banknorth (with Banknorth surviving). In the merger, each Banknorth share was
converted into a package of consideration that included Toronto Dominion common
shares, cash and an ongoing equity interest in the acquired entity. (In April 2007, Toronto
Dominion consummated the purchase of the remaining public shares in TD Banknorth).
Banco Bilbao Vizcaya Argentaria, S.A. also structured its 2007 acquisition of Compass
Bancshares, Inc. using multiple mergers, including two reincorporation steps. Compass,
a Delaware corporation, first reincorporated to Virginia by merging into a newly formed
subsidiary. BBVA then completed a statutory share exchange to acquire 100 percent of
the reincorporated Compass and effected a merger of the reincorporated Compass into
a newly formed Texas subsidiary of BBVA. A double merger structure was also used in
1998 in the otherwise more conventional NationsBank/BankAmerica and BANC ONE/First
Chicago NBD transactions, with the acquiror reincorporating in Delaware, in each case,
via a merger into a wholly-owned Delaware subsidiary. Such a technique is useful where
the parties, for various reasons, do not wish to use a reverse merger (the approach
employed in the merger of Firstar Corporation and U.S. Bancorp in 2000 where the
acquiror merged into the target) to acquire some of the attributes (e.g., state of
incorporation) of the target.
There are other instances in which the form of the transaction may be dictated by
one party having certain attributes that the parties wish to maintain after the merger by
having such party survive, regardless of which party is the nominal "acquiror.” For
example, the pre-Gramm-Leach-Bliley Act Star/Firstar transaction was structured so that
Firstar survived in an effort to maintain Firstar’s Regulation G insurance exemption, and
in the First Nationwide/Golden State transaction, First Nationwide, a privately-held
corporation, merged into Golden State to take advantage of Golden State’s already-listed
and widely-held common stock. In the 1998 Travelers/Citicorp transaction, also
336
a reverse triangular merger of a newly-formed merger subsidiary of the acquiror
with and into the target company where the target company survives as a
subsidiary of the acquiror;
a forward triangular merger where the target company is merged with and into a
newly-formed merger subsidiary of the acquiror where the merger subsidiary
survives; and
the formation of a new holding company into which both companies are
merged, either directly into the holding company or into separate merger
subsidiaries of the holding company.
Many variations on these basic themes are possible. A highly unusual structure
was used in 2004 when The Toronto-Dominion Bank acquired 51 percent of Banknorth
Group; Banknorth first reincorporated from Maine to Delaware via a merger with a newly-
formed Banknorth subsidiary and then a subsidiary of Toronto Dominion merged with
and into Banknorth (with Banknorth surviving). In the merger, each Banknorth share was
converted into a package of consideration that included Toronto Dominion common
shares, cash and an ongoing equity interest in the acquired entity. (In April 2007, Toronto
Dominion consummated the purchase of the remaining public shares in TD Banknorth).
Banco Bilbao Vizcaya Argentaria, S.A. also structured its 2007 acquisition of Compass
Bancshares, Inc. using multiple mergers, including two reincorporation steps. Compass,
a Delaware corporation, first reincorporated to Virginia by merging into a newly formed
subsidiary. BBVA then completed a statutory share exchange to acquire 100 percent of
the reincorporated Compass and effected a merger of the reincorporated Compass into
a newly formed Texas subsidiary of BBVA. A double merger structure was also used in
1998 in the otherwise more conventional NationsBank/BankAmerica and BANC ONE/First
Chicago NBD transactions, with the acquiror reincorporating in Delaware, in each case,
via a merger into a wholly-owned Delaware subsidiary. Such a technique is useful where
the parties, for various reasons, do not wish to use a reverse merger (the approach
employed in the merger of Firstar Corporation and U.S. Bancorp in 2000 where the
acquiror merged into the target) to acquire some of the attributes (e.g., state of
incorporation) of the target.
There are other instances in which the form of the transaction may be dictated by
one party having certain attributes that the parties wish to maintain after the merger by
having such party survive, regardless of which party is the nominal "acquiror.” For
example, the pre-Gramm-Leach-Bliley Act Star/Firstar transaction was structured so that
Firstar survived in an effort to maintain Firstar’s Regulation G insurance exemption, and
in the First Nationwide/Golden State transaction, First Nationwide, a privately-held
corporation, merged into Golden State to take advantage of Golden State’s already-listed
and widely-held common stock. In the 1998 Travelers/Citicorp transaction, also
336
