DEFINITION of 'Form S-4'

Form S-4 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.

BREAKING DOWN '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 demanding terms. This is often done in an attempt to avoid bankruptcy.

Investors closely watch Form S-4 submissions in order to attempt to make quick gains from M&A activity.

Form S-4 and the Nuances of Corporate Mergers

Mergers occur for a variety of reasons: they can help companies expand to new territories, unite common products and/or move into new segments, grow revenues, and increase profits--all in order to create 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 2+ companies engaged in unrelated business activities (i.e. different industries and/or geographical regions). A mixed conglomerate takes place between organizations that are attempting to gain product or market extensions through the merger, such as the 1995 merger between The Walt Disney Company merged with the American Broadcasting Company (ABC)
  • Congeneric: Two or more companies operate in the same market or sector with overlapping technology, marketing, production processes, and/or research and development (R&D). They join forces in this product extension merger, and a new 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 but compete in different markets. For example, WeWork recently merged with the Chinese co-working startup Naked Hub, which provides similar coworking services in Shanghai, Beijing and Hong Kong. WeWork is currently planning for significant growth outside the U.S.
  • Horizontal: This occurs between competitors operating in the same industry. The merger is typically part of consolidation and is more common in industries with fewer firms. Horizontal mergers can create a single, larger business with greater market share.
  • Vertical: When two companies that produce parts or services for a specific finished product merge. Typically these two companies operate at different levels within the same industry's supply chain and can achieve 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.

RELATED TERMS
  1. SEC Form BD

    A form that is completed and submitted to the Securities and ...
  2. SEC Form N-17f-2

    A filing with the Securities and Exchange Commission (SEC) that ...
  3. SEC Form N-5

    A filing with the Securities and Exchange Commission (SEC) required ...
  4. Form T

    Form T is an electronic form that FINRA requires brokers to use ...
  5. Exchange

    An exchange is a marketplace in which securities, commodities, ...
  6. SEC Form S-2

    A form from the Securities and Exchange Commission (SEC) that ...
Related Articles
  1. Investing

    SEC Filings: Forms You Need To Know

    The forms companies are required to file provide a clear view of their histories and progress.
  2. Investing

    Who Owns The Stock Exchanges?

    As M&A heats up among the exchanges, here's how the market currently looks.
  3. Taxes

    What's IRS Form 2848 Used For?

    It's a power of attorney tax form and here's what it can, and cannot, do.
  4. Investing

    Stock Exchanges Around The World

    We tell you about five of the most popular stock exchanges from around the globe.
  5. Taxes

    What IRS Form 1023 Is Used For

    To be treated as a tax-exempt organization, start by filling out this form.
  6. Investing

    The Wonderful World Of Mergers

    While acquisitions can be hostile, these varied mergers are always friendly.
  7. Retirement

    Employers: Don't Forget IRS Form 941

    Your obligations as an employer include various employment taxes. Use this form to report them.
  8. Tech

    What Are Centralized Cryptocurrency Exchanges?

    Most cryptocurrencies like bitcoin, Ripple and Ethereum are traded via centralized exchanges. Here's how.
  9. Taxes

    How to File a Tax Extension

    Learn the process you need to follow to get an extra six months to file your tax return.
RELATED FAQS
  1. Who needs to fill out IRS Form Schedule B?

    If you have several investments, there's a good chance you'll need to fill out a IRS Form Schedule B. Read Answer >>
Hot Definitions
  1. Treasury Yield

    Treasury yield is the return on investment, expressed as a percentage, on the U.S. government's debt obligations.
  2. Return on Assets - ROA

    Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets.
  3. Fibonacci Retracement

    A term used in technical analysis that refers to areas of support (price stops going lower) or resistance (price stops going ...
  4. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  5. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  6. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
Trading Center