A reverse merger occurs when a smaller, private company acquires a larger, publicly listed company. Also known as a reverse takeover, the “reverse” term refers to the uncommon process of a smaller company acquiring a larger one. A reverse merger also happens when a subsidiary is merged with its parent. The companies may not be in the same business. For a reverse merger to go through, shareholder approval is required. Through a reverse merger, a private company can get listed without having to go through the entire process of listing as the shares of the company being merged with it are already listed. In India, ICICI (Industrial Credit and Investment Corp. of India, which was the parent company) and two of its wholly-owned subsidiaries, ICICI Personal Financial Services Ltd and ICICI capital Services Ltd, reverse-merged with ICICI Bank Ltd, in 2002.

Answer given by Shubhamm Sir at 24-Jul-2024 08:11 PM