Issue № 69. August 2018

Mergers and Acquisitions as Alternative to IPO

Postgraduate student, School of Public Administration, Lomonosov Moscow State University, Moscow, the Russian Federation.
E-mail: FedunovaCA@spa.msu.ru

The article looks at an alternative way for a company to enter into the stock market by conducting a Merger or Acquisition (M&A) deal. The author finds that the likelihood of choosing IPO (Initial Public Offering) and M&A deal depends on the market characteristics. The purpose of this study is to analyze the mechanism of reverse takeovers in the OTC Markets Group.

The difficulties and the necessity of selecting listing from the black door are identified. The interpretation of shell companies and their types is given. The author analyzes both restrictions and requirements that are imposed by the US Securities&Exchange Commission (SEC) on companies traded in one of three categories OTCQX, OTCQB and OTC Pink. The stages of reverse absorption are considered in the article. The special importance of due diligence is emphasized.

Keywords

Mergers and acquisitions, IPO, reverse merger, shell-company, Over-the-Counter market.