Letter Of Transmittal For Shareholders: Fill & Download for Free

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PDF Editor FAQ

How does the process work when one company acquires another?

More often than not acquisitions of that size are mergers of some sort which means that the shareholders of the company being bought rather than the company itself, receive the compensation. The normal way its distributed is that at closing the buyer sends the aggregate consideration to a 3rd party (often a bank) who is acting as a paying agent. In the meantime the shareholders have received a letter of transmittal by which they indicate the way they would like to receive their payment (and if for instance, you have a choice of mix of consideration to get between stock and shares, your choice) and any required tax information (for instance a W-9). The shareholders send in their letters of transmittal to the paying agent and upon review and clearance the shareholder is distributed the money.

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