A reverse triangular merger is a new company that is formed when the acquiring company creates a subsidiary, that subsidiary buys the target company, and the target company then absorbs the subsidiary.
Like other mergers, a reverse triangular merger may or may not be taxed depending on the factors listed in Section 368 of the Internal Revenue Code.
At least 50% of the payment in a reverse triangular merger is the acquirer’s shares, and the acquirer receives all of the seller’s assets and liabilities.