SEC Form S-4

What Is SEC Form S-4?

SEC Form S-4: Registration Statement Under the Securities Act of 1933 must be submitted to the Securities and Exchange Commission (SEC) in the event of a merger or an acquisition between two companies. The form must also be submitted for exchange offers.

Form S-4 has two parts. Part I is the prospectus or proxy statement involved. Part II contains supplemental information that can incorporate expenses issued, private placements of securities, and extra tax information.

Understanding Form S-4

A public corporation registering any material information connected with a merger or acquisition or companies going through an exchange offer will file Form S-4. An exchange offer occurs when a company or a financial institution offers to exchange securities that it provides for similar securities at less requesting terms. This is much of the time done trying to keep away from bankruptcy.

Investors closely watch Form S-4 submissions to endeavor to make quick gains from M&A activity, and can download a company's S-4 straightforwardly from the SEC.

This form must also be submitted for exchange offers.

Why Merge?

Mergers happen for various reasons: they can assist companies with extending to new territories, join common products or move into new segments, develop revenues, and increase profits — all to make shareholder value. After a merger, new company shares are distributed to existing shareholders of both original businesses.

Five common types of mergers include:

• Conglomerate: This occurs between at least two companies participated in unrelated business activities (i.e., various industries or potentially geographical regions). A mixed conglomerate takes place between organizations that are endeavoring to gain product or market extensions through the merger, such as the 1995 merger between The Walt Disney Company and the American Broadcasting Company (ABC).
• Congeneric: at least two companies operate in the same market or sector with overlapping technology, marketing, production processes, or research and development (R&D). They combine efforts in this product extension merger, and another product line from one company is added to an existing product line of the other company.
• Market extension: This occurs when companies sell the same products however contend in various markets. For instance, WeWork merged with the Chinese collaborating startup Naked Hub in 2018, which provides similar cooperating services in Shanghai, Beijing, and Hong Kong. WeWork was seeking significant growth outside the U.S.
• Horizontal: This occurs between competitors operating in the same industry. The merger is ordinarily part of a consolidation and is more normal in industries with less firms. Horizontal mergers can make a single, bigger business with greater market share.
• Vertical: When two companies that produce parts or services for a specific finished product consolidate. Ordinarily, these two companies operate at various levels inside the same industry's supply chain and can accomplish cost reduction. A famous vertical merger was the 2000 combination of America Online (AOL) and media conglomerate Time Warner.

In all cases, participating firms must submit Form S-4 to the SEC to be sure the merger is legal.

Highlights

• The form must also be submitted for exchange offers.
• Investors closely watch Form S-4 submissions to endeavor to make quick gains from M&A activity.
• Form S-4 must be submitted to the SEC in the event of a merger or an acquisition between two companies to be sure the merger is legal.