Weighing Reverse Mergers For Private Chinese Cos.

Law360, New York (June 25, 2012, 2:02 PM EDT) -- In a reverse merger transaction, an existing “shell company” — which is a public reporting company with few or no operations — acquires a private operating company with a viable business — usually one that is seeking access to funding in the U.S. capital markets (Chinese reverse merger or CRM). Typically, the shareholders of the private operating company exchange their shares for a large majority of the shares of the public company. Although the public shell company survives the merger, the private operating company’s shareholders gain...
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