Back-End Merger (M&A Glossary)

Summary

A type of merger that is used to remove (i.e., “takeout”) minority shareholders of a target or force them to sell their shares. Usually done when the minority stands in the way of a transaction, the back-end merger allows the majority shareholder to purchase the minority shareholders’ shares from them for a set cash price. Unless they meet the statutory requirements for a squeeze-out (or shortform merger), back-end mergers still require the expense and time of filing a proxy statement with the SEC.