Personal Finance

What is a Reverse Takeover?

Reverse Takeover

A reverse takeover or reverse merger involves the acquisition of a public company by a private company. Some private firms prefer this route of going public because it eliminates the long and complex process of stock exchange listing associated with an initial public offering.

In this kind of arrangement, the public company issues new shares a majority of which are taken up by shareholders of the private company, hence the private company ends up owning more equity in the newly created entity.

 

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