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Simple English definitions for legal terms
bust-up merger
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A quick definition of bust-up merger:
A bust-up merger is when one company buys another company and then sells off parts of it to pay for the purchase. It's like buying a big toy set and then selling some of the toys to get your money back. This type of merger is different from other types of mergers where two companies join together to become one big company.A more thorough explanation:
A bust-up merger is a type of merger where the acquiring corporation sells off lines of business owned by the target corporation to repay the loans used in the acquisition. This type of merger is also known as a merger.
For example, if Company A acquires Company B through a bust-up merger, Company A may sell off certain divisions or assets of Company B to pay for the acquisition. This can result in the dissolution of Company B as a separate entity.
Bust-up mergers are often used when the acquiring corporation is only interested in certain parts of the target corporation's business and wants to divest the rest. This type of merger can also be used to raise funds for the acquiring corporation.