"B" Reorganization

Type "B" involves the acquisition of stock of one corporation by another, and the target corporation becomes a subsidiary of the acquiring, as a result.

Requirements of "B" Reorganization

1. The acquisition must be one of a series of acquisitions that are part of an overall plan to acquire the requisite control.
2. The plan of acquisition must be carried out in a relatively short period of time such as 12 months.
3. The acquisition must be made solely for voting stock.

Explanation:

1. Targets shareholders exchange Target stock solely for Acquiring 's voting stock.
2. T1 and T2 exchange the C stock received for the T1 and T2 stock held by their shareholders, and then TI and T2 dissolve.
3. Acquiring must be in control of Target immediately after the exchange.
4. Target becomes Acquiring 's subsidiary.
5. Targets former shareholders become Acquiring shareholders.

Proceed to "C" Reorganization