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English definition of “reverse merger”

reverse merger

noun [C]
 
 
FINANCE, STOCK MARKET a situation in which a private company (= one whose shares are not traded on a stock market) buys most of the shares in a public company so that it controls that company and becomes a public company itself. A reverse merger allows a private company to get capital on a stock market without an initial public offering (= making shares available for the first time): He staved off bankruptcy by engineering a reverse merger with a dormant holding company listed on the Milan stock exchange.
(Definition of reverse merger from the Cambridge Business English Dictionary © Cambridge University Press)
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